Infosys on Friday said it is not aware of any additional complaints made against the company other than the one it had disclosed to the bourses in October this year. The clarification comes amid reports of the US-based Schall Law Firm saying it has filed a class-action lawsuit against Infosys to recover losses suffered by investors in the wake of allegations of "unethical practices" at the Indian IT major.
Infosys, in a regulatory filing on Friday, said the company is aware of several reports referencing an additional securities class-action lawsuit against Infosys. "The company is not aware of any additional complaints, other than the initial complaint, which was disclosed on October 24, 2019," it added.
Infosys pointed out that it is not uncommon for plaintiffs' lawyers to issue press releases or other media communications asking potential plaintiffs to contact them in order to apply for lead plaintiff status in an existing lawsuit.
"It appears that the press communications by the Schall Law Firm is soliciting potential lead plaintiff applicants," it said. 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, had announced the filing of a class-action lawsuit against Infosys Ltd, and asked investors who had purchased the company's securities between July 7, 2018 and October 20, 2019, inclusive (class period), to contact the firm before December 23, 2019.
Stock exchange BSE had sought a clarification from Infosys on reports that the company was facing another lawsuit in the US. Infosys Chairman Nandan Nilekani had said the whistleblower complaint dated September 20, as well as an undated complaint had been received by one of the board members on September 30.
In the letter, dated September 20, 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 October 10, and to the company's non-executive board members on October 11, 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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