indica News Bureau-
A national shareholders right litigation firm in US announced that it will file a class action lawsuit against Infosys Ltd to recover losses suffered by the investors in the light of the allegations of ‘unethical practices’ at the Indian IT company.
According to the statement of the Schall Law Firm, It is found that the company violated sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated there under by the US Securities and Exchange Commission.
The Schall law Firm has asked investors who had purchased the company’s securities between July 7, 2018 and October 20, 2019, inclusive (class period), to contact the firm before December 23, 2019, reported PTI.
The Stock Exchange BSE is also waiting for a reply from the IT company as it had sought a clarification from Infosys on media reports that the company was facing another lawsuit in the US. Company shares dropped 2.63 per cent on the BSE Thursday.
The Securities and Exchange Board of India (Sebi) had sought additional information from the company, while the National Financial Reporting Authority (NFRA) – part of the corporate affairs ministry – is also looking into alleged accounting lapses at the firm.
Internal investigation going on
Whistleblower complaint dated September 20, and an undated complaint had been received by one of the board members on September 30, Infosys chairman Nandan Nilekani said.
The letter which carried a sign by ‘Ethical Employees’, alleged that CEO Salil Parikh as well as Chief Financial Officer Niranjan Roy engaged in force revenue recognition from large contracts not adhering to accounting standards.
Infosys has been investigating the whistleblower complaints.
The two complaints were placed before the audit committee on October 10 and on very next day they were also placed before non executive board members. The company had also declared its second quarter results on October 11
An external law firm has been roped in to conduct an independent investigation into the allegations. The Bengaluru-based company has said it will share the outcome of the investigation with all stakeholders at the relevant time.