October 25, 2019

Infosys Directs Shardul Amarchand Mangaldas, EY To Wrap Up Internal Probe Into Whistleblower Charges In 2 Weeks

[ By Bobby Anthony ]


Infosys has directed its law firm Shardul Amarchand Mangaldas and consultancy EY to complete their internal probe into whistleblower allegations of accounting malpractices within two weeks.

The focus of the probe is to ensure a speedy investigation and to not let this issue derail the growth momentum that Infosys has seen over the past year.

Chief Executive Officer Salil Parekh and Chief Financial Officer Nilanjan Roy who have been accused of unethical practices have been recused from the internal investigations.

The internal probe is likely to take a detailed look into the allegations to ensure that all serious accusations are examined closely.

It may be recalled that the Securities & Exchange Board of India (SEBI) has already taken suo motu cognizance of the whistleblower compliant though it was not made to the SEBI itself.

The SEBI is also expected to seek the Infosys audit committee findings for any action since the Infosys audit committee is already in the process of examining the whistleblower complaint for its merits.

Incidentally, there are indications that SEBI might seek clarification from the management of Infosys about charges leveled by whistleblowers.

A series of allegations have been leveled by whistleblowers referring to steps taken by CEO Salil Parekh, like resorting to unethical accounting practices to boost short-term profit and downsizing expenses by not recognizing visa cost.

Significantly, the Bombay Stock Exchange (BSE) had also asked Infosys why it was not kept informed about the whistleblower complaint beforehand.

“It is observed that Infosys has not made any disclosures under Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, with reference to receipt of whistleblower complaint mentioned in the announcement,” the BSE had said in a release.

As per Regulation 30 SEBI (LODR) Regulations, 2015, it is mandatory for listed entities to disclose any information that, in the opinion of the board, is material and could have an impact on share prices.

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