BENGALURU : There seems to be more problems in store for IT major Infosys as the National Finance Reporting Authority (NFRA) and the US Securities and Exchange Commision (SEC) have launched separate probes against the firm over the whistleblower complaints. NFRA under the Ministry of Corporate Affairs has been directed by the government to look into the allegations about the financial irregularities as well as violations of the accounting ethics.
The US SEC has also asked the Infosys to submit its response on the complaints of ‘unethical practices’ to boost revenue and profit. Infosys said it will cooperate with the SEC’s investigation.“Also, Securities and Exchange Board of India (SEBI) has requested additional information from the firm concerning the anonymous complaints. The firm will provide the information as per SEBI’s request,” it said.
Infosys added that it is aware of securities class action lawsuit that has been filed against the company in federal court in the US based on the generalised allegations in the anonymous complaints. ‘The firm intends to defend itself vigorously in such a lawsuit,” it said.Sources said that the regulatory probes will be based on the leakage of price-sensitive information and the window dressing of books ( manipulation of accounts).
“The SEBI probe in particular is focussed on the open positions in derivatives (November) meaning the option buyers who bought the future stock may benefit from any rise/fall in the Infosys stock price. It is considered an unusual market activity,” said a top executive at Nirmal Bang, brokerage company.
The regulatory authority may thus source all the past trading trading data from the Infosys to check if such instances have happened before too.
Meanwhile, the share price of Infosys again fell by two per cent at Rs 635 on BSE after the SEC and NFRA probes announcements Analysts expect a consolidation in the stock priceonly after the audit commitee of the Infosys before which the whistleblower complaint has been placed comes out with the responses.