The Ministry of Corporate Affairs has sought information from Infosys Ltd. regarding the anonymous whistleblower complaints which have triggered an investigation by the US Securities and Exchange Commission (SEC).
The move is the first step that the ministry takes when it takes cognizance of complaints or material information warranting government attention about any company, said a person familiar with the development. It does not purport an investigation or inspection of books, which is a decision taken later on based on facts. The ministry has in the recent past sought information from several companies, including in cases where statutory auditors have quit their assignment.
The corporate affairs ministry may also rope in accounting regulator National Financial Reporting Authority (NFRA) at a later stage in case the authorities find any merit in the whistleblower allegations about the accounting practices followed by the company. The complainants have raised questions about the revenue recognition by the company, which can have an impact on profit margins. An email sent to Infosys on Tuesday remained unanswered at the time of publishing.
Read EquityPandit’s Nifty IT Outlook of the Week