Infosys faces yet another class-action lawsuit in US to recover losses suffered by investors

US-based Schall Law Firm has said it will file a class-action lawsuit against Infosys Ltd to recover losses suffered by investors in the wake of allegations of 'unethical practices' at the Indian IT major

Press Trust of India December 12, 2019 20:05:37 IST
Infosys faces yet another class-action lawsuit in US to recover losses suffered by investors
  • US-based Schall Law Firm has said it will file a class-action lawsuit against Infosys Ltd to recover losses suffered by investors in the wake of allegations of 'unethical practices' at the Indian IT major

  • In October, Infosys had informed the stock exchanges of having received anonymous whistleblower complaints alleging certain unethical practices by the top management

  • US market regulator SEC has also initiated a probe on the matter, while Rosen Law Firm had said it was preparing a class action lawsuit to recover losses suffered by Infosys investors in the US

New Delhi: US-based Schall Law Firm has said it will file a class-action lawsuit against Infosys Ltd to recover losses suffered by investors in the wake of allegations of "unethical practices" at the Indian IT major.

In October, Infosys had informed the stock exchanges of having received anonymous whistleblower complaints alleging certain unethical practices by the top management.

US market regulator SEC has also initiated a probe on the matter, while Rosen Law Firm had said it was preparing a class action lawsuit to recover losses suffered by Infosys investors in the US.

"The Schall Law Firm, a national shareholder rights litigation firm, announces the filing of a class-action lawsuit against Infosys Ltd for violations of sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by the US Securities and Exchange Commission," a statement said.

Infosys faces yet another classaction lawsuit in US to recover losses suffered by investors

Representational image. Reuters

It asked investors who had purchased the company's securities between 7 July, 2018 and 20 October, 2019, inclusive (class period), to contact the firm before 23 December, 2019.

Infosys declined to comment on the matter.

Company shares dropped 2.63 percent on the BSE Thursday.

Infosys Chairman Nandan Nilekani had said the whistleblower complaint dated 20 September, as well as an undated complaint had been received by one of the board members on 30 September.

In the letter, dated 20 September, and signed by ''Ethical Employees'', it was alleged that CEO Salil Parikh as well as Chief Financial Officer Nilanjan Roy engaged in forced revenue recognition from large contracts not adhering to accounting standards.

The complaints were placed before the audit committee on 10 October, and to the company's non-executive board members on 11 October, also the day when Infosys announced its second-quarter results.

Infosys has been investigating the whistleblower complaints. 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.

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.

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