New Delhi: Infosys said Thursday that US market regulator SEC has initiated a probe on the whistleblower complaints that alleged ‘unethical practices’ by top management of the IT major. Also, Securities and Exchange Board of India (SEBI) has sought additional information from the company on the issue.
“The company has been in touch with the Securities and Exchange Commission (SEC) regarding the anonymous whistleblower complaints (anonymous complaints) and has learnt that the SEC has initiated an investigation into this matter. The company will cooperate with the SEC’s investigation,” Infosys said in a statement.
Also, SEBI has requested additional information from the company concerning the anonymous complaints, and Infosys will provide the information as per its request, it added.
Infosys said it is also ‘aware of a securities class action lawsuit’ that has been filed against the company in federal court in the US based on the generalised allegations in the anonymous complaints. “The company intends to defend itself vigorously in such a lawsuit,” it added.
US-based Rosen Law Firm had previously said it was preparing a class action lawsuit to recover losses suffered by Infosys investors in the US.
Following reports Monday of whistleblower allegations, Infosys had informed stock exchanges of having received anonymous whistleblower complaints alleging certain unethical practices. The Bangalore -based company said these had been placed before the audit committee.
In a more detailed statement Tuesday, Infosys Chairman Nandan Nilekani had said the whistleblower complaint dated September 20 as well as an undated complaint had been received by one of the board members, September 30.
These were placed before the audit committee October 10, and to the company’s non-executive board members October 11 (also the day when Infosys announced its second quarter results).
Leading exchange BSE has asked Infosys to explain why it did not make a disclosure about the whistleblower complaint.
In the letter, dated September 20 and signed by ‘Ethical Employees’, it was alleged that CEO Salil Parikh as well as Chief Financial Officer Nilanjan Roy engaged in forced revenue recognition from large contracts not adhering to accounting standards.
PTI
