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U.S. SEC investigates India's Infosys on whistleblower complaints

Credit: REUTERS/Vivek Prakash

Infosys Ltd on Thursday said the U.S. 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.

Adds background, shares, market value loss

BENGALURU, Oct 24 (Reuters) - Infosys Ltd INFY.NS, INFY.N on Thursday said the U.S. 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 said India's market regulator, the Securities and Exchange Board of India, has also asked it to submit information concerning the complaints.

Infosys, India's second-biggest IT services firm by revenue after Tata Consultancy Services Ltd TCS.NS, on Tuesday said it was investigating claims including that Chief Executive Officer 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 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 U.S. federal court based on the complaints, and that it intends to defend itself "vigorously".

Infosys shares, which have lost over 15% of their value since the firm disclosed the claims, were largely unchanged in early trade on Thursday.

($1 = 70.7650 Indian rupees)

Infosys loses $6.6 bln in market cap after whistleblower complaints

(Reporting by Chris Thomas in Bengaluru; Editing by Christopher Cushing)

((chris.thomas@thomsonreuters.com; +91-80-6749-8695;))

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

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