Infosys has set aside a reserve fund to battle a legal case in the US.
In the second quarter, company officials said the company has earmarked $35 million from its reserve to battle a case in the US around alleged misuse of B-1 visas in the past.
“As we are engaged with the US attorney’s office on a civil resolution of its Government’s investigation into our compliance with I-9 form and past use of B-1 visas, we have set aside a reserve of $35 million, including legal costs,” Infosys chief executive S.D. Shibulal said.
On May 2011, a district court in Texas had served a legal notice to Infosys on the alleged misuse of B-1 visa, which later prompted an investigation from the Department of Homeland Security. The investigation is ongoing.
B-1 visas are for short- term visits to the US and restrict employees from being employed there. This provision impacted the company’s net profit in dollar terms, which declined to $383 million or 8.4 per cent on a sequential basis and 11.1 per cent when compared to the same period last year.
When pressed for further details on whether the company expects fine payout, if found guilty, Shibulal said that as discussions are ongoing, the company cannot provide additional details at this time.
North America accounts for over 60 per cent of its overall revenues. In a regulatory filing, Infosys said that any action by the US Government against it would seriously affect its business.
venkatesh.ganesh@thehindu.co.in