Whistleblower complaints do serious harm to Infosys in the U.S, stock plunges over 15% in a day.
Software giant Infosys has a serious issue to resolve in the coming weeks.
The company’s US-listed shares; fell nearly 16% at the end of Monday’s trading on Nasdaq.
This comes after the company revealed that it has received whistle-blower complaints about various unethical practices undertaken by its executives.
An anonymous group within the firm that calls itself “ethical employees” has written to the Infosys Board as well as American regulator US Securities and Exchange Commission.
It alleges that the company’s CEO and CFO gave wilful misstatements and resorted to accounting irregularities to boost short-term revenue and profit.
They are said to have regularly bypassed reviews and approvals for large deals🤝 involving companies such as Intel, ABN AMRO, Verizon etc.
The group claims to have emails and voice recordings as evidence to the same.
How is Infosys dealing with it?
As per Infosys, the complaints have been placed before the company’s audit committee as per the company’s practice.
It will handle them in accordance with the company’s whistleblower policy.
Relevant for GS Prelims & Mains Paper II; Polity & Governance