The BSE on Wednesday asked information technology firm Infosys to explain why it did not disclose whistleblower complaints that alleged that the company’s top executives were following “unethical practices” to improve profits, PTI reported.
The whistleblowers, who called themselves “ethical employees”, told the IT major’s board of directors on September 20 that Infosys Chief Executive Officer Salil Parekh and Chief Financial Officer Nilanjan Roy had fudged financials and inflated profits. The whistleblowers added that they had emails and voice recording to prove their allegations. Parekh, the whistleblowers alleged, had made derogatory and sexist comments about board members DN Prahlad, D Sundaram and Kiran Mazumdar-Shaw.
Shares of Infosys at the National Stock Exchange tanked nearly 17% on Tuesday after the whistleblower complaints were revealed.
On Tuesday, Infosys Chairperson Nandan Nilekani said the first complaint, dated September 20, had been placed before the company’s audit committee on October 10. There was also an undated complaint which was placed before the panel. Nilekani’s statement, submitted to stock exchanges on Tuesday, said one of the board members received the first complaint on September 30.
Nilekani also said that both the complaints were placed before the company’s non-executive board members on October 11, the same day Infosys announced its quarterly results.
“Infosys Ltd vide an announcement dated October 22, 2019, titled ‘Statement’, submitted Statement attributable to Nandan Nilekani, Chairman of Infosys Ltd, wherein it is mentioned that Infosys Ltd had received whistle blower complaints,” the company wrote. ““However, it is observed that Infosys Ltd has not made any disclosures under Regulation 30 of Sebi (LODR) Regulations, 2015, w.r.t. receipt of whistleblower complaint mentioned in the announcement.”
Following this, the BSE asked Infosys to clarify why it had not disclosed the whistleblower complaint to the bourses. The BSE said that a reply is awaited from the IT firm.
Nilekani also said in an exchange filing on Tuesday that the audit committee has retained law firm Shardul Amarchand Mangaldas & Co to conduct an independent investigation into the complaints.
Now, follow and debate the day’s most significant stories on Scroll Exchange.
Limited-time offer: Big stories, small price. Keep independent media alive. Become a Scroll member today!
Our journalism is for everyone. But you can get special privileges by buying an annual Scroll Membership. Sign up today!