Allegations of misconduct at one of India’s largest tech companies have sent its stock plunging.
Infosys shares dropped more than 16% in Mumbai on Tuesday after the company said it was investigating two whistleblower complaints detailing alleged unethical practices.
A member of Infosys’ board received the complaints on September 30, chairman Nandan Nilekani said in a statement. The first complaint contains allegations of “disturbing unethical practices” while the second “largely deals with allegations relating to the CEO’s international travel,” he said. The company first disclosed the complaints on Monday.
The company is also aware of a letter written to US authorities under a whistleblower protection program, which refers to emails and voice recordings supporting the allegations, Nilekani said.
“Although we have not been provided any of the emails or voice recordings, we will ensure that the generalized allegations are investigated to the fullest extent,” he added.
The complaints accuse the company’s CEO of under-reporting costs in order to inflate profits and hiding “critical information” from auditors and the board, according to multiple Indian newspapers, which said they had obtained copies of the alleged complaints. CNN Business has not seen or independently verified the complaints, and an Infosys spokesperson declined to comment on the allegations beyond Nilekani’s statement.
The CEO, Salil Parekh, and CFO, Nilanjan Roy, have both been recused from the matter, Nilekani said. The investigation will be conducted by Shardul Amarchand Mangaldas & Co., a prominent Indian law firm.
“These complaints are being dealt with in an objective manner,” Nilekani said.
CNN Business has attempted to contact Parekh and Roy directly. The Infosys spokesperson said neither executive intended to comment at this time.
Infosys, headquartered in Bangalore, is one of India’s largest outsourcing companies. It reported revenue of $11.8 billion in the last fiscal year and has nearly 230,000 employees worldwide, including thousands in the United States.
This is not the first time the company has been hit by controversy over its finances. Parekh’s predecessor, Vishal Sikka, stepped down in 2017 after a public spat with some of its founders over executive pay and other issues.