US Markets

India's Infosys U.S. listed shares plunge after whistleblower complaints

Credit: REUTERS/CHRIS HELGREN

U.S.-listed shares of Infosys Ltd fell nearly 16% in premarket trading on Monday after the Indian software services exporter said it had received whistleblower complaints alleging "unethical practices" by the company's executives.

BENGALURU, Oct 21 (Reuters) - U.S.-listed shares of Infosys Ltd INFY.NINFY.NS fell nearly 16% in premarket trading on Monday after the Indian software services exporter said it had received whistleblower complaints alleging "unethical practices" by the company's executives.

The company issued a statement after The Economic Times reported that an anonymous group sent letters to Infosys' board and the U.S. Securities and Exchange Commission alleging that the company was taking "unethical" steps to boost short-term revenue and profit.

The group alleged that Chief Executive Officer Salil Parekh was bypassing reviews and approvals for large deals, the ET report said.

"In large contracts like Verizon, Intel, JVs in Japan, ABN AMRO acquisition, revenue recognition matters are forced, which are not as per accounting standards," the report said, citing cited the letters.

Reuters was not able to independently review the letters.

The complaints follow a strong quarterly show by Infosys, which raised the lower end of its annual revenue forecast on upbeat demand for its digital services from Western clients.

"(The complaints) 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," Infosys said in a filing to Indian stock exchanges.

ADRs of Infosys were down 15.7% at $8.91 in premarket trading on the New York Stock Exchange. Indian markets were closed on Monday for a holiday.

(Reporting by Chris Thomas in Bengaluru; Editing by Arun Koyyur)

((chris.thomas@thomsonreuters.com; +91-80-6749-8695; Reuters Messaging: chris.thomas.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Reuters

Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

Learn More