Infosys not off hook yet, wait for next verdict

Infosys should hold their celebratory horses before giving itself a clean chit in the Jack Palmer visa case as the company may not be completely off the hook yet.

A court in the US held on Monday some of the claims brought by Palmer against Infosys, especially those related to threats, aren’t covered by the state law there.

Palmer, a former employee, had claimed he was harassed after he blew the whistle over the company’s misuse of B1 visa. IT analysts Pinku Pappan and Ashwin Mehta at Nomura in their note argue that the company is still under investigation in the US by the Department of Homeland Security and a federal grand jury.

The company had received a subpoena from a grand jury in Texas in May last year. The Subpoena demands certain documents and records related to the company’s sponsorships for, and uses of, B1 business visas.

“Separately, another harassment case has been filed against Infosys in the federal court for the Northern District of California by Satya Dev Tripuraneni, an ex-employee,” the note said.

In another case, US Department of Homeland Security (DHS) is undertaking a review of Infosys’ employer eligibility verifications on Form I-9 with respect to employees working in the United States. The DHS has found errors in a significant percentage of Forms I-9 that the Department has reviewed. Should the DHS confirm the errors, it will impose penalties on Infosys.

Terming the court’s decision a short-term positive for the company, due to the lack of trial and the resulting potential press coverage, Wells Fargo in another note said “…The issue remains unresolved as we note that a grand jury investigation in Infy’s visa usage is still outstanding and a second whistleblower alleging similar visa misuse and retaliation by the company still remains.”

Sudin Apte, CEO of Offshore Insights said the ongoing visa case of Infosys will determine how Indian IT companies do business abroad.

“The visa case will have ramifications for the entire industry. Clients are also worried about this because it will impact their work,” he told Firstpost.