The rating agency in its detailed rationale said, “CRISIL will continue to monitor the situation and any additional developments.
Rating agency CRISIL on Friday placed its ‘CRISIL AAA’ rating on the long-term debt programme of Infosys on ‘Rating Watch with Developing Implications’. The rating action follows disclosure by the company on October 21 that it received anonymous whistleblower complaints alleging certain unethical practices in reporting financials and irregularities in international travel-related aspects of a senior management personnel.
The rating on the commercial paper programme has been reaffirmed at ‘CRISIL A1+’ by CRISIL. On October 22, the company informed the exchanges that the whistleblower complaints were placed before its audit committee on October 10, 2019, and before the non-executive members of the board on October 11, pursuant to its whistleblower practice.
The company also disclosed that on October 16 that it was made aware of a letter dated October 3, which was written to the Office of the Whistleblower Protection Program, Washington DC, along with emails and voice recordings in support of the allegations detailed in the whistleblower complaints.
On October 24, Infosys announced that the Securities and Exchange Commission, US, has initiated an investigation into the matter. Besides, Sebi has requested additional information from Infosys regarding the complaints. The company is cooperating with both the regulators.
The rating agency in its detailed rationale said, “CRISIL will continue to monitor the situation and any additional developments. The rating will be removed from watch once there is adequate clarity on the outcome of the investigation, along with updates provided by Infosys’ management. Any significant observations or findings, including from regulators and government agencies, will remain rating monitorables.”
Shares of Infosys fell 17% on the BSE this week.