Mumbai: Shares of Infosys Ltd nosedived 16% on Tuesday, their steepest intra-day fall in over six years, as another whistleblower complaint rocked the company's top management and spooked investors.
On Monday, The Economic Times reported that a group of employees of the company
-- "ethical employees" -- have written to the board of the company and US Securities and Exchange Commission, alleging coercion by Chief Executive Officer Salil P. Parekh and Chief Financial Officer Nilanjan Roy to undertake creative accounting to bump-up revenues.
The group has claimed that they have e-mails and voice recordings to support their allegations. The letter added that the complainants were asked to not fully recognise visa costs, and were pressured to not immediately recognise $50 mln in reversals in a contract in Jul-Sep, the report said.
At 1131 IST, shares of Infosys were down nearly 15% at 656 rupees on the National Stock Exchange.
Infosys today said it has recused the CEO and the CFO from the investigation initiated by the board of the company in the allegations made by a group of employees over unethical revenue recognition.
Infosys acknowledged the receipt of the letters from the whistleblowers in an exchange filing on Monday.
One board member received two anonymous complaints on Sep 30 -- one dated Sep 20 titled "Disturbing unethical practices" and the second undated with the title, "Whistleblower Complaint", said the company's Chairman Nandan Nilekani in a statement to the stock exchanges earlier today.
However, Nilekani said the board has not received any of the e-mails or voice recordings but that the "generalised allegations" will be investigated to the full extent.
Nilekani said the audit committee of the company in consultation with the internal independent auditor Ernst & Young has appointed Shardul Amarchand Mangaldas to conduct an independent investigation into the allegations.
"The board is committed to uphold highest standard of corporate governance and protect the interests of all stakeholders," Nilekani said.
The whistleblower complaint is the second such complaint to rock the top management of the company in the past five years. Parekh's predecessor lost his job after whistleblowers alleged wrongdoing in the company's acquisition of Panaya and Skava for $340 mln.
Earlier this year, the company settled a case with the Securities and Exchange Board of India after a probe by the regulator found that severance pay for former chief financial officer Rajiv Bansal was not in accordance with remuneration policy.
