US markets regulator SEC concludes Infosys whistleblower probe

US markets regulator SEC concludes Infosys whistleblower probe
Photo Credit: Reuters
24 Mar, 2020

The United States markets regulator Securities and Exchange Commission has concluded its probe into information technology services giant Infosys. 

The clean chit by SEC helped shares of Infosys to rally by 10% during the trade on Tuesday. With the end of the investigation into the whistleblower complaint, the company has put behind most of the regulatory probes into its business.

“The company received notification from the SEC that it has concluded its investigation and the company does not anticipate any further action by the SEC on this matter. The company has also responded to all the inquires received from the Indian regulatory authorities and company will continue to cooperate with the authorities should there be any additional requests for information," Infosys said in a statement to the Indian exchanges.

Last October, a whistleblower group, which called itself ‘ethical employees’, had complained against Infosys. The group alleged that the company was taking unethical steps to boost its short term revenue and profit numbers.  

Early this year, an audit committee appointed by Infosys to probe allegations against CEO Salil Parekh, found no evidence of financial irregularities or executive misconduct.

However, Infosys maintained that it would not reveal the full investigation report to the public, citing confidentiality concerns.

Meanwhile, Infosys had raised its revenue forecast range for 2020, alongside a higher-than-expected net profit that it reported for the December quarter. The company expects revenue to grow between 10% and 10.5% on a constant currency basis in the financial year ending March 2020, compared with its previous forecast of 9-10%. 

The Covid-19 pandemic has thrown a spanner in the works of most IT companies. The outbreak could also upset the growth projections of the IT industry, which grew at around 7.7% in the current fiscal.

The slowing growth in the banking and financial services segment, as well as the retail sector along with the expected recession, could severely impact the growth of $190 billion Indian IT industry.