Allegations against Infy’s Parekh, Roy Manipulated: Rakesh Jhunjhunwala

Related image

Bengaluru, NFAPost : RAKESH Jhunjhunwala, the Big Bull of Indian stock market, today said the complaints made against Infosys CEO Salil Parekh and CFO Nilanjan Roy of indulging in unethical practices are manipulated and done with a purpose.

“I think the Securities and Exchanges Board of India (Sebi) should not only enquire about the complaint, but Sebi should also enquire into all the trades which have taken place 10 days before and 10 days after the complaint,” he told CNBC-TV 18.

A group of whistle-blower had shot off a letter dated September 21 to the US market regulator, the Securities and Exchange Commission (SEC), alleging that Parekh and Roy indulged in unethical practices on the accounts sheet to project inflated revenues and profits.

Even before the letter was leaked to the press, there was an unusual activity in Infosys put options, raising doubts about the fundamentals of the stock.

A buyer of put option bets whether the stock would climb up or spiral down.

Sebi already is investigating into bizarre increase of derivative positions in Infosys before the letter was made public.

The regulator is ascertaining if the people with a prior knowledge of the whistle-blower’s letter looked to profit from a fall in the company’s share price.

Infosys shares had spiraled down about 14 per cent after the letter became public over the past weekend.

Sebi has sought details of derivative trades in Infosys between September 21 and October 19 from the bourses.

The outstanding positions in Infosys put options at Rs 740 strike price had surged from nearly zero to 18 lakh between September 18 and September 25.

As on September 18, Infosys shares were trading at Rs 830 apiece. The build-up at Rs 740 strike price suggests some in the market were betting on the stock to fall more than 10 per cent.

Toeing similar lines, former Sebi Director JN Gupta had also raised questions whether the allegations against Parekh and Roy, were genuine or orchestrated.

“If you remember last time, NR Narayana Murthy was so much critical about the company board. After the assumption of Nandan Nilekani as company chairman, Murthy has neither criticized the board, nor pressed for its reconstitution as he did when he was at loggerheads with the then board chairman R Seshasayee.

If this is the case, it must be asked if the previous as well as the current lack of governance issues are orchestrated or genuine,” Gupta had told in an interview.

Murthy, in 2017, had a long battle with Seshasayee and was very critical about the functioning of the board and quite vocal about its reconstitution, which he felt was required to set matters right at the company he founded.

However, after Nilekani’s assumption, Murthy neither made public his ire against the board, nor demanded its reconstitution.

In the light of the fresh allegations, Gupta said, there must be a relook into the issue of attaching earnings of top executives with quarter-on-quarter targets set by the company, which compels them to resort to such malpractices.

On whistle-blower’s letter, Jhunjhunwala also suggested that the complaints should be entertained only after the identity of the complainants are revealed.

He also said the complaints should not be leaked to media before the completion of the investigation. If this is not followed, there amounts to media trial, which is highly incorrect, he added.

Jhunjhunwala also said the complainant should be held responsible for false and baseless allegations.

Apart from US Securities and Exchange Commission and Sebi, the Indian government has asked the National Financial Reporting Authority (NFRA) to look into the complaints.

NFRA is an independent regulator for the auditing profession and comes under the Ministry of Corporate Affairs.

Related posts

OnePlus 8 Real-Life Photos Leaked Ahead of Its Launch

Electric Vehicles This WeekNewsTech

Maxwell X-57 – NASA’s First 14-Motor Propelled Electric Plane Unveiled


Tata Starbucks Achieves Pay Parity For Women, Men


Oh God, Not Again: Whistleblower Levels Fresh Allegations Against Infosys CEO

Sign up for our Newsletter and
stay informed
error: Right Click Disabled !!