Infosys share price closed over 16% lower on Sensex and Nifty as the IT firm faced allegations of indulging in 'unethical' practices to generate more profit and revenue from an anonymous employee group, named 'Ethical Employees'. Infosys share price ended 16.21% or 124 points lower at Rs 643.30 compared to the previous close of Rs 767.75 on BSE. On Nifty, the stock of the IT major crashed 16.65% lower to Rs 640 against the previous close of Rs 767.85.
It was the top loser on both Sensex and Nifty today.
Infosys share price was stuck in the lower circuit of 10% during opening trade , losing 76 points to Rs 691 compared to the previous close of Rs 767.75 on BSE.On Nifty too, the stock of the IT major crashed 10% to Rs 691 against the previous close of Rs 767.85.
Later, the stock lost more ground after lower circuit limit was revised to 20% on intense selling pressure. On BSE, the stock lost 16.86% intra day to Rs 638.83. On NSE too, the share fell over 16% to Rs 638.35.
Reacting to the negative sentiment around the stock, US-listed shares of Infosys plummeted nearly 16% in premarket trading on Monday.
Continuing its pre-morning trends, Infosys ADR opened 15.5 per cent lower at $8.94 and was moving near to its 52-week low level of $8.85.
Also read: Allegations employees made against Infosys' Salil Parekh, Nilanjan Roy
Indian markets were closed on Monday for assembly election in Maharashtra. On Friday, Infosys share price closed 0.18% or 1.35 points lower at Rs 767.75.
In a complaint letter to the board of Infosys and the US Securities and Exchange Commission (SEC) on July 20, the group has claimed that the company asked them not to "fully recognise costs like visa costs" in last quarter to earn more profit.
It added that when the auditor pointed it out, the issue was postponed by the company. The group said they were prevented from sharing data on large deals and important financial measures during board meetings.
"CEO and CFO are asking us to show more profits in treasury by taking up risks and make a change to policies. This will provide short-term profits," the group alleged.
Also read: Whistleblower letter alleges accounting irregularities in Infosys
Meanwhile, Infosys in a statement said it's investigating the charges. "The whistleblower complaint has been placed before the Audit Committee as per the company's practice and will be dealt with in accordance with the company's whistleblowers' policy," the IT firm said.
The slump in Infosys share price today is similar to the fall more than two years ago when CEO and MD Vishal Sikka resigned leading to a loss of Rs 10,000 crore in market wealth in a single session.
On August 18, 2017, Vishal Sikka put in his papers citing distractions and disruptions as reasons for his resignation. The stock fell 13% intra day with investors losing Rs 17,000 crore that day. The stock closed 9.60 percent or 98.05 points lower at 923.10 that day.