Three US law firms have begun preparations to file class action lawsuits on behalf of unnamed shareholders who, they said, suffered losses on account of the resignation of Vishal Sikka as CEO.
Pomerantz LLP, Bronstein, Gewirtz & Grossman, and Rosen Law said they were investigating potential claims on behalf of shareholders over “materially misleading business information”.
On Friday, Sikka said he would step down as Infosys CEO. His action follows allegations over irregularities in the acquisition of Panaya, an Israeli technology firm, levelled by company founder NR Narayana Murthy.
“Infosys is listed in the US, where jurisdiction exists for shareholders to file a lawsuit. Law firms will capitalise on it,” said Shriram Subramaniam, managing director of InGovern Research Services, a proxy advisory firm.
“Even in India, investors could file a class action suit against Infosys,” he said, adding the Companies Act, 2013, allowed it.
Rosen Law, which said it represented investors from across the world, highlighted Sikka’s claim that criticism by Infosys’ founders was a reason for his resignation.
“Over the last many months and quarters, we have all been besieged by false, baseless, malicious and increasingly personal attacks… This continuous drumbeat of distractions and negativity… inhibits our ability to make positive change and stay focused on value creation,” Sikka’s resignation letter stated.
On the New York Stock Exchange, where Infosys is listed, its American depository receipt fell 7.19 per cent on news of Sikka’s resignation, prompting the law firms to examine a class action lawsuit against the company.
Infosys shares fell 9.6 per cent on Indian exchanges on Friday, wiping away Rs 22,500 crore in market capitalisation.