Infosys Loses Over Rs 50000 Crore As Shares Plunge 16% After Whistleblower Alleges CEO Of Fudging Profits
The Logical Indian Crew India
October 23rd, 2019 / 10:48 AM
Information and Technology giant Infosys suffered a loss of more than Rs 50000 crore as its shares plunged after a whistleblower claimed that the company indulged in ‘unethical practices’ to magnify the revenue and profits.
The stock closed at Rs 643.30 on BSE with a loss of 16.21 per cent. The fall in share prices is reported to be the biggest single-day drop Infosys has witnessed in the last six years.
A group of employees working at Infosys who called themselves ‘ethical employees’ had shot an anonymous letter to the US Securities and Exchange Commission (SEC) and Infosys Board. They alleged Chief Executive Officer(CEO), Salil Parekh of applying unethical measures to enhance profit margin and short-term revenue of the company.
“He (Parekh) directs them to make wrong assumptions to show margins. CFO Nilanjan Roy is compliant and he prevents us from showing in board presentations large deal issues…several billion-dollar deals of the last few quarters have nil margin,” the letter read.
“CEO and CFO are asking us to show more profits in treasury by taking up risks and make a change to policies. This will provide short-term profits,” the group alleged.
Chairman Nandan Nilekani in response came forward and ensured that an investigation is underway to check the alleged malpractices carried by the senior employees of Infosys.
The stark fall in the share prices mirrored the case that happened with Infosys two years ago when the shares fell unprecedentedly after CEO and MD Vishal Sikka resigned from the company citing disruption as a reason for his resignation. The company got a jolt of Rs 10,000 crore as their stocks fell 13 per cent with investors losing Rs 17,000 crore.
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Written by : Prashasti Awasthi
Edited by : Shubhendu Deshmukh