SEC begins probe into Infosys, class action suit filed
BENGALURU: Infosys Ltd on Thursday said the US Securities and Exchange Commission (SEC) has launched a probe into whistleblower claims that the Indian software services firm used ‘unethical practices’ to boost revenue and profit.
The company will cooperate with the SEC’s investigation, the statement said.
The company said India’s market regulator, the Securities and Exchange Board of India (SEBI), has also asked it to submit information concerning the complaints.
Infosys, India’s second-biggest information technology services firm by revenue after Tata Consultancy Services Ltd, on Tuesday said it was investigating claims including that chief executive officer (CEO) Salil Parekh bypassed reviews and approvals for large deals fearing the negative impact of reduced profit on Infosys’ share price.
It also disclosed claims that chief financial officer (CFO) Nilanjan Roy prevented employees from highlighting issues around large deals in presentations to the board.
Parekh and Roy declined to comment when contacted through Infosys.
Infosys on Thursday also said a securities class action lawsuit has been filed against it in a US federal court based on the complaints, and that it intends to defend itself “vigorously”.
On Tuesday, Mint reported that New York-based Rosen Law Firm said it is preparing a class action lawsuit to recover losses suffered by Infosys’ shareholders. Infosys has retained law firm Shardul Amarchand Mangaldas to conduct an independent investigation into the whistle-blower complaints.
Mint’s Swaraj Singh Dhanjal contributed to this story.
MARKETS REGULATOR SEBI HAS ASKED THE IT FIRM TO SUBMIT INFORMATION CONCERNING THE COMPLAINTS