India’s Infosys U.S. listed shares plunge after whistleblower complaints
FILE PHOTO: The Infosys logo is seen at the SIBOS banking and financial conference in Toronto, Ontario, Canada October 19, 2017. REUTERS/Chris Helgren
BENGALURU (Reuters) – U.S.-listed shares of Infosys Ltd (INFY.N) (INFY.NS) fell nearly 16% in premarket trading on Monday after the Indian software services exporter said it had received whistleblower complaints alleging “unethical practices” by the company’s executives.
The company issued a statement after The Economic Times reported here that an anonymous group sent letters to Infosys’ board and the U.S. Securities and Exchange Commission alleging that the company was taking “unethical” steps to boost short-term revenue and profit.
The group alleged that Chief Executive Officer Salil Parekh was bypassing reviews and approvals for large deals, the ET report said.
“In large contracts like Verizon, Intel, JVs in Japan, ABN AMRO acquisition, revenue recognition matters are forced, which are not as per accounting standards,” the report said, citing cited the letters.
Reuters was not able to independently review the letters.
The complaints follow a strong quarterly show by Infosys, which raised the lower end of its annual revenue forecast on upbeat demand for its digital services from Western clients.
“(The complaints) have been placed before the audit committee as per the company’s practice and will be dealt with in accordance with the company’s whistleblower policy,” Infosys said in a filing here to Indian stock exchanges.
ADRs of Infosys were down 15.7% at $8.91 in premarket trading on the New York Stock Exchange. Indian markets were closed on Monday for a holiday.
Reporting by Chris Thomas in Bengaluru; Editing by Arun Koyyur