Kiran Mazumdar Shaw, the outspoken businesswoman and the founder biotechnology firm Biocon limited, has reached a settlement with Securities and Exchange Board of India (SEBI) in the insider trading case. Shaw, lead independent director of IT major Infosys has violated provisions of the Prohibition of Insider Trading (PIT) regulations.
Shaw has agreed to pay 3.01 lakh rupees to SEBI as fine, in violation of the Infosys’ insider trading policy.
The ongoing crisis at the IT major, Infosys shows no signs of relenting even as the shares of the company slumped over 15 per cent. While stock markets were closed on Monday, the IT company witnessed a similar plunge of over 15 per cent in its American Depository Receipts (ADRs) listed at the New York Stock Exchange also. This is the biggest fall in the company’s shares at the stock market in over six years.
The stock market plunge was triggered by the anonymous whistleblowers’ letter accusing the Chief Operating Officer (CEO) Salil Parekh and Chief Financial Officer (CFO) Nilanjan Roy of “unethical practices” at Infosys.
The anonymous complaint has also alleged that critical information has been withheld from the auditors and the board members. The letter stated, “In large contracts like Verizon, Intel and JVs in Japan, ABN Amro acquisition, revenue recognition matters are forced which are not as per accounting standards. We have emails and voice recordings and will share when investigators ask us. We are asked not to share large deal information with auditors.”
Both CFO and CEO allegedly asked the whistleblowers to “show more profits” in the treasury by taking up risks and changing policies. All this was done to increase short-term profits, they alleged.
The anonymous letter has also accused CEO Salil Parekh of passing racist and misogynistic remarks. The letter stated, “The CEO told us, ‘no one in the board understands these things. They are happy as long as the share price is up. These two Madrasis (Sundaram and Prahlad) and Diva (Kiran) make silly points. You just nod and ignore them.’ We have voice recordings of this.”
Previously, a few months ago, a Twitter spat broke out between Kiran Mazumdar-Shaw, the billionaire founder entrepreneur and Managing Director of Biocon Limited and T.V. Mohandas Pai, another billionaire and Chairman of Manipal Global Education who was the former director of IT giant Infosys. The spat was on the comment of another billionaire and industry leader Adi Godrej, Chairman of Godrej Group.
While addressing a gathering to celebrate the 150th anniversary of his alma mater St Xavier’s College, Mumbai, Godrej said, “It’s not all a rosy picture now. One must not lose sight of the massive impoverishment plaguing our nation which can seriously damage the pace of growth going forward and prevent us from realising our potential.”
The industry veteran claimed that the rising intolerance can damage economic growth of the country. “Rising intolerance, social instability, hate crimes, violence against women, moral policing, caste and religion-based violence and many other sorts of intolerance that are rampant,” added Godrej.
Kiran Mazumdar-Shaw supported his statement and wrote on Twitter quoting an NDTV article. She wrote, “rising Intolerance, Hate Crimes Can “Seriously Damage” Growth: Adi Godrej – well spoken.”
Kiran Mazumdar Shaw, Chairperson and Managing Director, Biocon Ltd. is also a prominent name associated with the Infosys. She is the lead independent director on the board of Infosys. She figured among the TIME magazine’s 100 most influential people in the world.
The shocking allegations of racism, sexism and profit inflation made by the latest anonymous whistleblower complaint has created a deep crisis within the Infosys, Asia’s second most valuable IT services firm. The company has been battling a series of whistleblower complaints over the last two years.
Trouble for Infosys is only mounting as the Securities and Exchange Board of India (SEBI) may soon seek clarification from Infosys over the whistleblower complaint, and why the IT major did not share the whistleblower complaint dated September 30 with the stock exchanges.
