Infosys Ltd. on Monday said its investigation into a whistleblower complaint, which had alleged its top executives of dressing up the company's books, had prima facie received no “supporting evidence” and hence the company had not disclosed them earlier.
The response by India's second-largest software services provider to the exchanges came nearly two weeks after a letter, dated Sept. 30, by a group of “Ethical Employees” accused Chief Executive Officer Salil Parekh and Chief Financial Officer Nilanjan Roy of unethical practices—including hiding visa costs for employees. The National Stock Exchange had sought a clarification from the company following the whistleblower allegations. The NSE has queried the company regarding compliance with disclosure regulations and Infosys' own ‘materiality for disclosure' policy.
In response Infosys said, in a response dated Nov. 2 (posted by the exchange on Nov. 4), that -
When the whistleblower complaints were received there was no supporting evidence that has been received by the company along with these anonymous complaints to substantiate the allegations.
Unless an event or information is deemed ‘material' under the LODR Regulations, or determined as ‘material' by the company, it has no obligation to disclose it.
The company has so far not received any prima facie evidence to corroborate any of the allegations made. In the absence of this Infosys “is not in a position to determine the concreteness, credibility and materiality of the anonymous complaints”.
And hence, no disclosure is required to be made.
Further, given the circumstances at this stage,where there is complete absence of prima facie evidence and the anonymous complaints are still under investigation, the company is not in a position to determine the concreteness, credibility and materiality of the anonymous complaints. In light of the above, no disclosure under Regulation 30 of the LODR Regulations is required to be made.Infosys statement to NSE - Nov. 2
The company statement reiterated that its audit committee, after discussions with internal auditor EY, has retained the services of the law firm Shardul Amarchand Mangaldas & Co., to investigate the matter, adding it will update exchanges once the investigations are concluded and reported.
Shares of Infosys rose 6.5 percent intraday, the most in three months.
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