No prima facie evidence to corroborate allegations, Infosys tells NSE

Infosys has said there is no prima facie evidence that the company has received to corroborate any of the allegations made in the whistleblower group complaint against the company CEO.

In a statement to the NSE, Infosys said there is no supporting evidence that has been received by the company along with these anonymous complaints to substantiate the allegations. “Unless an event / information is deemed ‘material’ under the LODR (Listing Obligations and Disclosure Requirements) Regulations, or determined as ‘material’ by the company, the company has no obligation to disclose the same under Regulation 30 of the LODR Regulations.

Sriram Subramaniam, MD and founder of proxy advisory and corporate governance firm, InGovern, said the clarification does not disclose much. “The statement actually confuses investors. At this juncture, there was no need to say that no prima facie evidence is found. It is as if they are trying to influence the ongoing investigation when it should be out anyday,” he pointed out.

Infosys said the anonymous complaints do not fall within the purview of deemed material events under the LODR Regulations. Further, given the circumstances at this stage, where there is complete absence of prima facie evidence and the anonymous complaints are still under investigation, the company is not in a position to determine the concreteness, credibility and materiality of the anonymous complaints. In light of the above, no disclosure under Regulation 30 of the LODR Regulations is required to be made.

Services of law firm

The Audit Committee has retained the services of the law firm, Shardul Amarchand Mangaldas & Co, to investigate the matter. Moreover, even before the appointment of the independent investigator the Audit Committee began consultations with independent internal auditors Ernst & Young. The independent internal auditors were given a mandate to review certain processes on the basis of the allegation in the anonymous complaints.

“As requested, we will update the stock exchanges on the basis of key findings of the investigation reports once these are concluded,” he said. The anonymous complaints make certain allegations. Two of the anonymous complaints were received on September 30. On October 16, the company was made aware of a letter that refers to September 30 complaint purportedly written to the Office of Whistleblower protection program, Washington D.C.

For an event/information to warrant a disclosure, unless it is specifically listed as a deemed material event, the event/information needs to be disclosed only if determined by a company to be material.

Following the clarification, Infosys stock price ended the day at ₹710.10, about 3.3 per cent higher than the previous closing price.

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