Indian markets were red on Tuesday amid a fall in shares of Infosys Ltd. Traders remained cautioned, as they continue to wait for a fresh cue on the potential trade deal between the US and China.
At 1152 hours the BSE Sensex plunged 67.63 or 0.17 per cent at 39,230.75, while Nifty fell 23.75 points or 0.20 per cent 11,638.10 points.
During the intraday trade, Infosys shares slumped 14.43 per cent on Sensex and 14.42 on NSE after an anonymous whistleblower letter alleged that the Chief Executive Officer (CEO) Salil Parekh and Chief Financial Officer (CFO) Nilanjan Roy of ‘unethical practices’ for some quarters.
A group of Infosys employees has written an anonymous letter alleging that in the quarter under review of fiscal 2019-20, the management pressure on them to not recognise reversals of $50 million (Rs 353 crore) of upfront payment in FDR contract, as it will slash profits for the quarter and negatively affect the company’s stock price.
“We have high respect for all of you and bring to your notice the unethical practices of the CEO in recent quarters. The same measures were taken in the current quarter also to boost short-term revenue and profits,” the 2-page letter dated September 20, read. It was addressed to the board of directors.
It further said, “Parekh and Roy have been resorting to unethical practices for many quarters, as evident from their e-mails and voice recordings of their conversations.”
“Critical information is hidden from the auditors and board. In large contracts like Verizon, Intel and JVs (Joint Ventures) in Japan, ABN Amro acquisition, revenue recognition matters are forced, which is not as per the accounting standards,” the letter added.
In a statement to the exchanges, Infosys said that the letter has been placed before the Audit Committee and will be dealt with in accordance with the company’s whistleblower policy.
Meanwhile, Yes Bank (7.30 per cent), Hero Motocorp (2.35 per cent) and ICICI Bank (2.23 per cent) were among the top gainers, while Infosys was followed by Tata Motors (3.29 per cent) and HCL Tech (2.28 per cent) in top losers’ list.
(With input from agencies)