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Infosys on whistleblower complaints: No evidence received to corroborate allegations

Infosys shares, which had plunged 16 per cent when details about the complaints surfaced on October 21, gained 3 per cent to Rs 709 on the BSE on Monday after the company’s clarification.

By: ENS Economic Bureau | Mumbai |
November 5, 2019 1:10:45 am
 Infosys whistleblower complaint, Infosys unethical practice complain, Infosys news, indian express business news According to Infosys Chairman Nandan Nilekani’s statement last month, one board member received two anonymous complaints on September 30.

Infosys, which is facing allegations of “disturbing unethical practices”, on Monday said it has not received any supporting evidence to corroborate the allegations in the anonymous complaints filed by whistleblowers.

“With respect to the anonymous complaints, there is no prima facie evidence that the company has received until date to corroborate any of the allegations made,” Infosys said. “In any event, the Audit Committee retained the services of the law firm, Shardul Amarchand Mangaldas & Co. to investigate the matter,” it said in a stock exchange filing.

Moreover, even before the appointment of the independent investigator, the Audit Committee began consultations with independent internal auditors Ernst & Young, it said. “The independent internal auditors were given a mandate to review certain processes on the basis of the allegation in the anonymous complaints,” the filing said.

Infosys shares, which had plunged 16 per cent when details about the complaints surfaced on October 21, gained 3 per cent to Rs 709 on the BSE on Monday after the company’s clarification.

According to Infosys Chairman Nandan Nilekani’s statement last month, one board member received two anonymous complaints on September 30. One complaint was dated September 20, titled ‘Disturbing unethical practices’, and the second undated, ‘Whistleblower Complaint’.

Nilekani said these complaints were placed before the Audit Committee on October 10 and before the non-executive members of the board on October 11.

However, stock exchanges were not informed about these complaints and the company informed the bourses only on October 21 — almost three weeks after the board members received the complaints.

On October 16, the company was made aware of a letter that refers to the September 30, 2019 complaint purportedly written to the Office of Whistleblower Protection Program, Washington, DC, it said. US market regulator Securities and Exchange Commission (SEC) has initiated an investigation into the anonymous whitleblowers’ allegations of unethical practices to fudge numbers and governance lapses at Infosys. The Securities and Exchange Board of India (Sebi) is also looking into the issue.

Defending its decision to not report the issue to bourses, Infosys said, “the anonymous complaints do not fall within the purview of deemed material events under the LODR Regulations.”

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