Infosys to ‘vigorously’ defend itself against whistleblower allegations

• Infosys has trouble piling on from all side.
  
• The company is being investigated by the SEC over whistleblower complaints filed against management and SEBI is looking into Infosys over possible insider tradingas well.
  
• Infosys plans to ‘vigorously’ defend itself against all allegations.
  

Infosys and its executives have had a tough week with troubles piling on.

On one side, the Securities and Exchange Commission (SEC) has started an investigation into US-listed company over whistleblower complaints filed against its management.

Back home, the Securities and Exchange Board of India (SEBI) has also asked Infosys to disclose additional information as per Regulation 30.

On behalf of Infosys stakeholders, Rosen law firm has filed a class action lawsuit against the company in the US. All this while, it is busy investigating the allegations and its stock has been taking a beating.

In the midst of it all the tech giant plans to defend itself against ‘vigorously’ against all allegations, according to a company filing with the SEC.

The issue with SEBI

Laws in India require Infosys to disclose material information with respect to the allegations in the whistleblower complaints. But, there’s no exact definition of ‘material’.

SEBI lists out 16 pieces of information that have to be filed but other than that, it’s up to the company to decide what they would consider ‘material’.

The sudden stock movement

SEBI isn’t just looking into the non-disclosure of information but also possible insider trading. Infosys’ stock crashed by a massive 16% when news of whistleblower complaints came to light.

But beforehand, a suspicious futures and options trade was made which on this very crash.

The possibility of insider trading also arises since the board members and company were aware of the whistleblower complaints on October 11. It was only on October 20 that the whistleblower sent a copy of the complaint to the media, which caused the stock to take a hit.

The company said that they had hired the law firm, Shardul Amarchand Mangaldas and Co to investigate the matter.