Infosys Ltd. faces another lawsuit, this time a class action suit from the Schall Law Firm, a shareholder rights litigation firm based in Los Angeles.
According to the complaint, Infosys made false and misleading statements to the market and used improper recognition of revenue to boost short-term profits.
This follows a whistleblower complaint against Infosys and its CEO Salil Parekh, which made similar allegations. However, the company could not find any evidence regarding the same after conducting an investigation.
The complaint in the US said that the company's CEO Salil Parekh skipped standard reviews of large deals to avoid accounting scrutiny. It adds that the company's finance team was pressured to conceal details of these deals and other accounting matters from auditors and the company's Board of Directors.
Schall Law Firm has encouraged investors with losses in excess of $100,000 to contact the firm. This includes Investors who purchased the company's stocks between July 7, 2018 and October 20, 2019, inclusive (the "Class Period").
The company issued a statement saying, "It is aware of several media stories referencing an additional securities class action lawsuit against Infosys. The company is not aware of any additional complaints, other than the initial complaint, which was disclosed on October 24, 2019. The Company notes that it is not uncommon for plaintiffs’ lawyers to issue press releases or other media communications asking potential plaintiffs to contact them in order to apply for lead plaintiff status in an existing lawsuit. It appears that the press communications by the Schall Law Firm is soliciting potential lead plaintiff applicants."
Infosys Ltd is currently trading at Rs706.05 up by Rs4.2 or 0.6% from its previous closing of Rs701.85 on the BSE.
The scrip opened at Rs706.90 and has touched a high and low of Rs711.55 and Rs700.10 respectively. So far 46,04,832 (NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs2,98,879.78cr.