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Investors Lose Rs 53,000 Crore As Infosys Shares Sink Amid Row Over CEO

The sharp losses in Infosys shares followed the worst fall in the company's American Depositary Receipts since 2013 on Monday.

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Infosys shares fell after CEO Salil Parekh was accused of unethical practices

Infosys shares nosedived nearly 17 per cent on Tuesday in their worst single-day drop in over six years, wiping out investors' wealth worth nearly Rs 53,000 crore. The dive in Infosys shares came a day after India's second largest IT services company said it had received complaints from anonymous whistleblowers alleging certain unethical practices. While the whistleblowers accused CEO Salil Parekh of leading an effort to shore up profits through irregular accounting, Infosys said one of the complaints dealt largely with allegations relating to his international travel to the US. The allegations come just two years after the IT major endured a shake-up that saw its top boss Vishal Sikka leave the company.
Here are 10 things to know about this big story and Infosys shares:
  1. 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 regulatory filing on Monday.
  2. At Tuesday's close, Infosys' market capitalisation or MCap stood at Rs 2.74 lakh crore, as against Rs 3.27 lakh crore in the previous session.
  3. Infosys shares nosedived as much as 16.86 on the BSE during the session before ending at Rs 643.30, down 16.21 compared with the previous close. On the NSE, the settled 16.65 per cent lower at Rs 640. (Also read: Infosys raises revenue guidance, Q2 profit rises 6%)
  4. The company's American Depositary Receipts had suffered the worst fall since 2013 on Monday.
  5. In a statement released on Tuesday morning, Infosys chairman Nandan Nilekani said the two anonymous complaints have been placed before the company's Audit Committee on October 10, 2019 and the non-executive members of the board on October 11, 2019. "These Complaints are being dealt with in an objective manner," he said.
  6. One of the complaints "largely deals with allegations relating to the CEO's international travel to the US and Mumbai", the Infosys chairman added.
  7. He also said that the CEO and CFO have been recused from this matter to ensure independence in these investigations.
  8. The audit committee has retained law firm Shardul Amarchand Mangaldas to conduct an independent investigation, and the company's board will take appropriate steps based on the outcome of the investigation, Mr Nilekani said.
  9. A series of whistleblower complaints over the past two years have wrought havoc at Infosys - Asia's second-most valuable IT services firm - triggering the exit of Vishal Sikka as CEO after a confrontation with co-founder Narayana Murthy.
  10. Until Monday, Infosys shares in India had gained 16.35 per cent so far this year.




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Highlights

1
Infosys shares suffer worst single-day fall in more than six years
2
Whistleblowers accuse CEO Salil Parekh "disturbing unethical practices"
3
Infosys American Depositary Receipt faced worst fall since 2013 on Monday

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