Big setback for Infosys; Anonymous whistleblower shoots off letter to SEC

This development is likely to bring trouble for technology firm Infosys as an anonymous whistleblower has questioned the company for its undue delay in filing Form 20F with US Securities and Exchanges Commission. The company has also been asked to confirm whether any ongoing investigation with the agency is pending.

"The company's undue delay in filing Form 20F with its deafening silence on any reason for such delay raises several questions and risks to the shareholders." "I request you to require the company to inform the shareholders on the exact reasoning for the delay as well as confirm whether any ongoing investigation with SEC is pending," said the letter, which is in possession of PTI. The letter written to SEC yesterday.

The report said that a company, as per rules, has to file the Form 20F with US SEC within four months from the end of the financial year. As Infosys follows April-March fiscal year cycle, it has time till the end of July to file the necessary information with the SEC.

The letter reportedly stated that the company normally files Form 20F, which contains relevant information for shareholders to vote on the financials, between May and June before the annual general meeting of its shareholders. But this year, the letter reportedly stated that the Form 20F is not filed and the AGM is already over. The AGM was held on June 23 in Bengaluru.

PTI report quoted the letter as saying, "The American Depository Receipts (ADRs) shareholders had been made to vote on the financial statements without getting the full information. Form 20F will contain the effectiveness of internal controls, key risks etc, which are relevant for ADR shareholders to approve the financials." 

Further, the letter sought to know whether there is any ongoing investigation by SEC because a company typically delays its annual filings in such situations. It also sought to know that - there is any connection between the delay in annual filing with SEC and the resignation of erstwhile co-chairman Ravi Venkatesan from the board.

"Typically a company delays its annual filing with SEC only when there is an ongoing investigation by SEC. Also, recently the erstwhile co-chairman Ravi Venkatesan resigned from the board without assigning any reason. The shareholders have to know whether there is any connection between these two events and are they related," PTI report quoted the letter. 

It has asked that the company should clarify on this front because Venkatesan was involved in approving Panaya acquisition, which was a bone of contention between the management-board and Founder N R Narayana Murthy.

The letter reportedly added, "It is Ravi Venkatesan as co-chairman involved in approving the Panaya acquisition as well defending it and finally writing it off and making a decision to sell the company. Is there any ongoing investigation by SEC and is there any connection to Ravi Venkatesan leaving he company and any investigation?" 

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On the whistleblower's questions, Infosys spokesperson, however, reportedly said that the company wouldn't comment on this issue. Earlier in April, in a similar latter, a whistleblower has questioned the decision of the company to sell Panaya.