Mumbai: Infosys shareholders we-re stunned as a whistleblower’s complaint to company and the US Se-curities Exchange Com-mission about its unethical accounting practices to boost earnings kno-cked 16.21 per cent from its share price value on Tuesday.
It came as a rude shock for 9.19 lakh Infosys shareholders who lost Rs 52,922.18 crore of their accumulated share price value in a day as the stock opened 10 per cent lower and later plunged 16.86 per cent to `638.30 intra-day and finally closed at `643.30 on the BSE.
A group of employees describing themselves as “ethical” employees wro-te to the Infosys Board of Directors and the US SEC alleging unethical practices by its Chief Executive Officer Salil Parekh and Chief Financial Officer Nilanjan Roy in recent quarters.
The letter accused CEO Parekh of bypassing reviews and approvals for large deals for fear of reduced profits, having a negative impact on its shares.
The letter also accused CEO Parekh of instructing sales team not to send mails for approval and directing the sales team to make wrong assumptions to show margins. Also, CFO Nilanjan Roy prevents employees from highlighting issues around large deals in presentations to the company's board, the whistleblower alleged.
Infosys in a statement to the stock exchanges said that its audit committee was examining the allegations, in line with its policy on whistleblowers.
Nandan Nilekani, chairman of Infosys, said, “These complaints are being dealt with in an objective manner. The undated whistleblower complaint largely deals with allegations relating to the CEO’s international travel to the US and Mumbai.”
“We will ensure that the generalized allegations are investigated to the fullest extent. Additionally, to ensure independence in these investigations the CEO and CFO have been recused from this matter,” Nilekani said.
“Because the investigation is ongoing, there will be no further comment so that investigation may be conducted in a thorough and objective manner. At the appropriate time we will provide a summary of the investigations results. The Board is committed to uphold highest standard of corporate governance and protect the interests of all stakeholders,” Nilekani added.