Indian IT Giant Infosys under the Scanner Again: Faces Yet Another Lawsuit
The Schall Law Firm, a reputed shareholder rights law firm that is based in Los Angeles. It comes up with the announcement that an action lawsuit has filed against Indian IT giant Infosys Limited. It is in the United States for producing false financial statements. The litigation firm further explained that the case was against the IT organization. It recovers losses suffered by investors. It was due to allegations of implementing unethical practices at the renowned Indian IT major.
Whistleblower Complaints
After that, in October, it is believed that the IT organization had alerted the stock exchanges. It received some anonymous whistleblower complaints claiming some unethical practices taking place at the top management level. United States market regulator SEC has started a probe regarding this issue. It is understood that the Rosen Law Firm was getting ready with a ‘class action lawsuit’ for recovering losses. Those losses were suffered by all the Infosys investors based in the United States.
What Are The Complaints?
As per the complaint, it alleged that Infosys made misleading and also false statements to the investors or the public and utilized inappropriate recognition of revenue for boosting short-term profits. The complaint made in the United States was about CEO Parekh. He used to skip standard reviews of major deals for avoiding accounting scrutiny. The Schall Law Firm’s complaints come just a few months after Infosys faced a whistleblower complaint. We understand that CEO Salil Parekh was under the scanner on similar grounds. However, the Indian IT giant after a probe into the charges claimed that it could not obtain any evidence in this regard.
The complaint filed in the United States claims that Parekh was in the habit of skipping standard reviews of big deals just to steer clear of accounting scrutiny. Moreover, the finance team of the firm was under constant pressure to hide all deal-associated details and information about other accounting issues from the firm’s board of directors and auditors.
Based on all these facts, the IT firm’s public statements happened to be false and content-wise misleading all through the class period. Once the truth revealed in the market about Infosys, the investors had to go through incredible damages as per a statement released by the law firm. Moreover, Schall admitted that it motivates investors with losses of more than $100,000 for contacting the litigation firm.
Case in Progress
Investors brought Infosys’s securities from July 7, 2018, to October 20, 2019. They requested to get in touch with the firm preferably before December 23, 2019. The Schall Law Firm is known to represent investors across the globe. It is a specialist in the securities class action litigation cases and also, in shareholder rights lawsuits. The Bengaluru-based IT organization said that it would be sharing the results or findings of the investigation with all concerned stakeholders at the right time.
The Securities and also Exchange Board of India has asked Infosys to provide some additional information regarding the IT Company. NFRA or the National Financial Reporting Authority is currently scrutinizing the alleged accounting issues and also lapses at Infosys.