Infosys drops after whistleblower complaint

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Infosys was down 10% at Rs 691 after the company informed that it has received anonymous whistleblower complaints alleging certain unethical practices.

Infosys said the company has received anonymous whistleblower complaints alleging certain unethical practices. These have been placed before the Audit Committee as per the company's practice and will be dealt with in accordance with the company's whistleblower policy. The announcement was made yesterday, 21 October 2019, when stock markets were closed on account of assembly elections.

A separate announcement made before market hours today, 22 October 2019, in a statement attributable to Infosys Chairman, Nandan Nilekani, said that the company is providing an update on the steps taken in response to the anonymous whistleblower complaints it disclosed on 21 October 2019.

One Board member received two anonymous complaints on 30 September 2019. Pursuant to whistleblower practice, the company has placed both complaints before the Audit Committee on 10 October 2019 and before the non-executive members of the Board on 11 October 2019. These complaints are being dealt with in an objective manner. The whistleblower complaint largely deals with allegations relating to the CEO's international travel to the US and Mumbai.

Additionally, on 16 October 2019 the company was made aware of a letter dated 3 October 2019 which was purportedly written to the office of whistleblower protection program, Washington D.C. This letter refers to the 20 September 2019 complaint, and to emails and voice recordings in support of the allegations. Although the company has not been provided any of the emails or voice recordings, it will ensure that the generalized allegations are investigated to the fullest extent. Additionally, to ensure independence in these investigations the CEO and CFO have been recused from this matter.

Post the board meeting of 11 October 2019 the audit committee began consultation on terms of reference for their prima facie investigation. The Audit Committee has now retained the law firm to conduct an independent investigation. The board, in consultation with the audit committee, will take such steps as may be appropriate based on the outcome of the investigation.

Meanwhile, the S&P BSE Sensex was up 32 points or 0.08% to 39330.82.

On the BSE, 90,009 shares were traded in the counter so far compared with average daily volumes of 3.01 lakh shares in the past two weeks. The stock hit a high of Rs 691 and a low of Rs 691 so far during the day.

On a consolidated basis, Infosys' net profit rose 4.55% to Rs 3,971 crore on a 3.78% increase in total revenue from operations to Rs 22,629 crore in Q2 September 2019 over Q1 June 2019.

Infosys is a global leader in next-generation digital services and consulting.

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