US-listed shares of Infosys plummeted nearly 16% in premarket trading on Monday after the Indian IT major said it had received anonymous whistleblower complaints alleging “unethical practices” by its senior executives.
Infosys in a statement said, “The whistleblower complaint has been placed before the Audit Committee as per the company’s practice and will be dealt with in accordance with the company’s whistleblowers’ policy.”
The company issued this statement after an alleged group of employees who recognise themselves as ‘Ethical employees’ have levelled allegations against current CEO Salil Parekh and CFO Nilanjan Roy of ‘wilful misstatement’ and ‘accounting irregularities’ to make the company’s performance look good.
Reacting to the news, American depositary receipts (ADRs) of Infosys slipped as much as 15.7 per cent to $8.91 in premarket trading on the New York Stock Exchange, Reuters reported.
Continuing its pre-morning trends, Infosys ADR opened 15.5 per cent lower at $8.94 and was moving near to its 52-week low level of $8.85. At the time of reporting, Infosys ADR was quoting at $ 9.29, down 12.16 per cent.
Indian markets were closed on Monday for assembly election in Maharashtra. According to market analysts, Infosys shares are likely to see a big slide when market opens on Tuesday.
Infosys share price is likely to see a 10-15 per cent downside in the near term, said Harit Shah, Research Analyst at Reliance Securities. On Friday, Infosys shares closed trade at Rs 767.75 apiece, down 0.18 per cent.
In a complaint letter to the board of Infosys and the US Securities and Exchange Commission (SEC) on July 20, the group has said it has emails and voice recordings to substantiate their claims.
They have claimed that the company asked them not to “fully recognise costs like visa costs” in last quarter to earn more profit. It added that when the auditor pointed it out, the issue was postponed by the company.
Edited by Chitranjan Kumar