Tech services giant Infosys Ltd said on Friday that a class action lawsuit filed against the company and its some of its current and former employees in October 2019, has been dismissed by the plaintiff "voluntarily" and "without prejudice".
The class action lawsuit was filed in the Eastern District of New York after whistleblowers allegations against the company in October 2019. "The complaint, which was filed in the Eastern District of New York, was brought on behalf of a class consisting of persons or entities who purchased the Company's publicly traded securities between July 7, 2018 and October 20, 2019, and alleged claims for violations of the US federal securities laws. On May 21, 2020, the plaintiff voluntarily dismissed the lawsuit without prejudice," Infosys told the stock exchanges.
Three US investor rights law firms had filed a class-action lawsuit against Infosys after a group of whistleblowers alleged the company and its CEO Salil Parekh of indulging in unethical practices in October 2019. The companies, Bragar Eagel & Squire, The Rosen Law Firm and Howard G Smith, filed lawsuits on behalf of investors who purchased Infosys securities.
These companies claimed that Infosys disclosed about whistleblower complaints alleging 'unethical practices' by the company's management to "inappropriately boost" short-term revenue and profit. They also said complaints alleged that Infosys CEO Salil Parekh bypassed reviews and approvals of large contracts to avoid accounting scrutiny.