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Infosys Says US Market Regulator Probing "Unethical Practices" Complaints

A securities class action lawsuit has also been filed against the company in a US federal court based on the complaints, the company said.

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Infosys Says US Market Regulator Probing 'Unethical Practices' Complaints

Infosys received complaints from anonymous whistleblowers alleging certain unethical practices.


Highlights

  1. US SEC launched an investigation into whistleblower claims
  2. Infosys received complaints alleging unethical practices
  3. Complaints have been placed before the Audit Committee, Infosys said

Infosys Ltd said on Thursday that the US Securities and Exchange Commission had launched an investigation into whistleblower claims that the software services firm used "unethical practices" to boost revenue and profit.

The company said market regulator Securities and Exchange Board of India (SEBI) had also requested additional information from the company concerning the complaints.

A securities class action lawsuit has also been filed against the company in a US federal court based on the complaints, the company said, adding that it intends to defend itself "vigorously".

Replying to the clarification sought by BSE, Infosys said that before conclusion of the investigation of the generalised allegations in the complaints, a disclosure under Regulation 30 of Listing Obligation and Disclosure Requirement Regulations was not required.

Infosys 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 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.

In a statement released on Tuesday, Infosys chairman Nandan Nilekani said that "these Complaints are being dealt with in an objective manner".

Infosys shares declined 1.25 per cent to Rs. 642.60, underperforming the Sensex which was up 0.40 per cent.



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