Shares of Infosys plunged over 16 per cent on Tuesday, wiping out Rs 53,450.92 crore from its market valuation.
Leading exchange BSE on Wednesday asked Infosys to explain why it did not make a disclosure about a whistleblower complaint which alleged that the company's top executives were following "unethical practices" to shore up profits through irregular accounting ways.
On Tuesday, Infosys Chairman Nandan Nilekani said the whistleblower complaint dated September 20 had been placed before the audit committee on October 10. There was an undated complaint which has also been placed before the committee.
One of its board members had received the complaints on September 30, according to Nilekani's statement submitted to the stock exchanges on Tuesday.
Nilekani had said that both the complaints were placed before the company's non-executive board members on October 11, also the day when Infosys announced its second quarter results.
"Infosys Ltd vide an announcement dated October 22, 2019, titled 'Statement', submitted Statement attributable to Nandan Nilekani, Chairman of Infosys Ltd, wherein it is mentioned that Infosys Ltd had received whistle blower complaints.
"However, it is observed that Infosys Ltd has not made any disclosures under Regulation 30 of Sebi (LODR) Regulations, 2015, w.r.t. receipt of whistleblower complaint mentioned in the announcement," the company said in a filing to the bourses on Wednesday.
The exchange has sought clarification from Infosys for "non-disclosure of the information about the whistleblower complaint", the filing said.
According to the BSE, a reply from the company is awaited.
Following reports of whistleblower allegations, the IT major, on Monday, informed the stock exchanges that it has received anonymous whistleblower complaints alleging certain unethical practices and that the same have been placed before the audit committee.
Against the backdrop of Nilekani's statement on Tuesday and the company's filing to the bourses a day before, the BSE has sought clarification.
Nilekani had also said the audit committee has retained law firm Shardul Amarchand Mangaldas & Co to conduct an independent investigation into the issue.
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 letter, addressed to the board, claimed that recent big deal wins carried negligible margins and that Roy directed certain people to make wrong assumptions to show margins.
On Tuesday, shares of Infosys plunged over 16 per cent on Tuesday, wiping out Rs 53,450.92 crore from its market valuation.
The scrip gained over one per cent in afternoon trade on the BSE and the NSE.
US-based Rosen Law Firm has said it is preparing a class action lawsuit to recover losses suffered by Infosys investors in the US.
In 2017, Infosys had witnessed a protracted stand-off between its high-profile founders and the previous management over allegations of governance lapses and issues relating to severance package doled out to former executives, including ex-CFO Rajiv Bansal.
Following the tussle, then CEO Vishal Sikka quit followed by some board members. Infosys co-founder Nandan Nilekani was then brought in as chairman to steer the company. Parekh joined the company in January last year as the CEO.
Infosys has also settled with Sebi the case of alleged disclosure lapses regarding a payment made to Bansal.
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