Mumbai, Oct 21 (IANS) Infosys shares might open with heavy losses on Tuesday, after a letter by anonymous employees surfaced, accusing its Chief Executive Officer (CEO) Salil Parekh and Chief Financial Officer (CFO) Nilanjan Roy of unethical practices for several quarters.
The Indian markets were closed on Monday owing to elections in the Maharashtra, but Infosys also listed on the New York Stock Exchange fell over 15 per cent post the surfacing of a whistleblower letter.
“We anticipate an 8 to 10 per cent fall in Infosys shares during the early trade on Tuesday. It may recover later in the day,” Deepak Jasani of HDFC Securities said.
Infosys late on Monday in a regulatory filing said the company has received anonymous whistleblower complaints alleging certain unethical practices.
“These 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,” it said.
The employees have alleged that in the quarter under review of fiscal 2019-20, the management put immense pressure on them to not recognise reversals of $50 million (Rs 353 crore) of upfront payment in FDR contract, as it will slash profits for the quarter and negatively affect the company’s stock price.
“Parekh and Roy have been resorting to unethical practices for many quarters, as evident from their e-mails and voice recordings of their conversations,” said the complainants, who called themselves ‘ethical employees’ in a 2-page letter to the city-based IT behemoth’s board of directors on September 20, a copy of which has been accessed by IANS.
The employees said they have been instructed not to share large deal information with auditors.
“Critical information is hidden from the auditors and board. In large contracts like Verizon, Intel and JVs (Joint Ventures) in Japan, ABN Amro acquisition, revenue recognition matters are forced, which is not as per the accounting standards,” said the letter.