Infosys shares fall 16.86 per cent day after CEO, CFO accused of 'unethical practices'

Mumbai | Jagran News Desk: Infosys shares plunged by 16.86 per cent on Tuesday -- wiping Rs 53,451 crore from its market valuation -- in their worst single-day drop in over six year, a day after anonymous employees of India's second largest IT services company accused CEO Salil Parekh and CFO Nilanjan Roy of unethical practices. 

On the Bombay Stock Exchange (BSE), Infosys shares opened 10 per cent lower at Rs. 645.35 apiece, and plunged to as low as Rs. 645.35 in the first few minutes of trade, down 15.94 per cent compared to their previous close. The stock fell as much as 10 percent to Rs 691.10 per share on the NSE.

Meanwhile, company chairman Nandan Nilekani said that said the Infosys audit committee will conduct an independent investigation on whistleblower allegations. 

The committee began consultation with independent internal auditors EY, and has retained law firm, Shardul Amarchand Mangaldas & Co. to conduct an independent investigation, Nilekani noted in his statement to the stock exchanges.

Nilekani said one board member had received two anonymous complaints on September 30, 2019 - one dated September 20, 2019, titled “Disturbing unethical practices” and an undated note with the title, “Whistleblower Complaint”.

He said both had been placed before the audit committee on October 10, 2019, and before the non-executive members of the board the following day.

"Post the board meeting of October 11, 2019, the audit committee began consultation with the independent internal auditors (Ernst & Young) on terms of reference for their prima facie investigation. The audit committee has now retained the law firm of Shardul Amarchand Mangaldas & Co. (October 21, 2019), to conduct an independent investigation," Nilekani noted in his statement.

The whistleblower complaint by a group that calls itself "ethical employees" had alleged CEO Salil Parekh and CFO Nilanjan Roy were indulging in "unethical practices" to boost short-term revenue and profits.

Infosys on Monday had said the whistleblower complaint has been placed before the audit committee as per the company's practice, and that it will be dealt with in accordance with the company's whistleblowers policy.

Nilekani, in his statement on Tuesday, said the company was made aware of another letter (dated October 3) that was purportedly written to the Office of Whistleblower protection program, Washington DC. This letter referred to the September 20, 2019, complaint, and to emails and voice recordings in support of the allegations.