US-listed shares of Infosys plunged nearly 16 per cent in premarket trading on Monday. Stretching 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. A software services exporter stated that it had received whistleblower grievances claiming “unethical practices” by the company’s executives.
As the analysts predicted, Infosys shares fell 16 per cent on Tuesday, marking their worst intraday drop in over six years, following the incident of an anonymous letter by the “ethical employees”. They accused its Chief Executive Officer (CEO) Salil Parekh and Chief Financial Officer (CFO) Nilanjan Roy of carrying out unethical practices.
In the 2-page letter by the employees in which they claimed themselves to be ethical, to the city-based IT behemoth’s board of directors on September 20 made the allegation.
Seeking no response from the board to their letter, an unnamed whistleblower on behalf of the unethical employees on October 3 wrote to the US-based office of the Whistleblower Protection Programme. In the letter, it alleged willful misstatement material accounting irregularities for (the) last two quarters (April-September).
Replying the company in a statement on Monday said the whistleblower grievance had been placed before the audit committee as per the company’s rules.
Infosys said both the complaints were placed before the audit committee on October 10. Moreover, on October 11, it was placed before the non-executive members of the board. Furthermore, they added that the complaints are being dealt squarely. The anonymous whistleblower complaint mostly deals with allegations relating to the CEO’s international travel to the US and Mumbai.
Market Report on Infosys
As per the report, the stock of Infosys plunged as much as 10 per cent share on the BSE and NSE. Most brokerages said the accusations could lead to much potential risk for the company. Moreover, this could put the stock under stress in the upcoming days.
Infosys share price was held in the weaker circuit of 10%, losing 76 points to Rs 691 level related to the previous close of Rs 767.75 on BSE.
On Nifty, the stock of the company slipped 10% to Rs 691 level compared to the previous close of Rs 767.85. Infosys investors lost Rs 44,383 crore in market wealth today with the stock’s market capitalisation sinking to Rs 2,82,656 crore on BSE compared to Friday’s close of Rs 3,26,939 crore.