Infosys shares tank over financial fudging allegations

Infosys shares tank over financial fudging allegations

Bombay Stock Exchange in Mumbai. (PTI photo)

The shares of IT major Infosys are receiving a severe beating from shareholders in the Indian Equity markets after whistleblower letter alleged fudging in financial numbers by the company on behest of its CEO Salil Parekh. The letter also alleged racist remarks and misogynistic remarks by Parekh against the members of the Board.

The share of Infosys opened 10% lower on the Bombay Stock Exchange at Rs 691. On Friday, company’s scrips had closed at Rs 767.75 a piece, almost Rs 77 higher.

Also read — Infosys hires law firm to investigate charges on CEO

According to market insiders, there was a heavy selling pressure on the Infosys stocks in the unofficial trade on Monday – when both BSE and NSE were closed due to elections in Maharashtra. Brokerage expect Infosys shares to tank by 15% in the near term, as a result of this.

Meanwhile, top executives from two of the domestic institutional investors who have large stake in Infosys told DH that they want to sell their holdings in Infosys. “It is a very grave allegation. We have parked a lot of money in the company. We want to sell it, but the selling pressure was very heavy even in the pre-market trade,” executive from one of the fund houses said.

Also read — Whistleblowers sting Infosys; ADRs tank

The American Depository Receipts (ADR) of Infosys also opened 15.4% lower in the New York Stock Exchange (NYSE) at $8.94 apiece on Monday. The ADRs closed the day’s trading 12.11% lower at $9.29 apiece. In the pre-open trade, the company’s ADR dipped by almost 18%.

An ADR is a negotiable certificate issued by a US depository bank representing a specified number of shares—or as little as one share—investment in a foreign company's stock. The ADR trades on markets in the US as any stock would trade.

Also read — Infosys CEO Parekh faces financial fudging allegations

In the case of Infosys, one equity share held in India is equivalent to one ADR held on NYSE.

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