Lawsuit against Infosys on the whistleblower complaint dismissed in the US

Lawsuit against Infosys on the whistleblower complaint dismissed in the US
Photo Credit: Reuters
22 May, 2020

A class-action lawsuit filed against Infosys stands closed after the plaintiff voluntarily dismissed the lawsuit without prejudice, the information technology (IT) services giant said in a disclosure to market exchanges on Friday.

Filed in the Eastern District of New York with the United States District Court, the lawsuit was regarding a whistleblower complaint against both former and current top executives of Infosys, including CEO Salil Parekh. It alleged the executives fudged the company's revenue and profit numbers. 

"The lawsuit was brought on behalf of a class consisting of persons or entities who purchased the company's publicly traded securities between July 7, 2018 and October 20, 2019, and alleged claims for violations of the US federal securities laws," the statement to exchanges said. Los Angeles-based The Schall Law Firm had filed the complaint.

In late March, US markets regulator Securities and Exchange Commission (SEC) had concluded its probe into Infosys

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

Infosys did not make the full report public.

Last October, an anonymous group calling itself ‘ethical employees’ had accused Infosys of using improper ways to boost revenue and profit numbers. Infosys’ CEO Parekh and CFO Nilanjan Roy were at the centre of the whistleblower storm.

The company maintained that it followed due diligence and appointed Shardul Amarchand Mangaldas (SAM) to look into the legal side of the complaint while external auditor PricewaterhouseCoopers also looked at the company's books.

During the March quarter of FY 20, Infosys reported a 0.8% sequential revenue growth in its operations at Rs 23,267 crore. On a year-on-year basis, the topline grew by 8% during the quarter.