Infosys Limited ADS Each Represented BY One Equity Share (MM) (NASDAQ:INFY)
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2 Years : From Dec 2011 to Dec 2013
The U.S. Department of Homeland Security has found "errors in a significant percentage" of Infosys Ltd.'s (500209.BY) employment authorization forms, raising concerns about a potential penalty against the software exporter.
The errors could eventually result in fines, the Bangalore-based company said in an April 18 filing with U.S. exchanges. It added that it doesn't yet know how much money it could lose.
The shares of India's second-largest software exporter by sales took a beating on the news Monday, at one point sliding to a seven-month low of INR2,306.60. At 0825 GMT, the stock was trading 3.6% lower at INR2,320.15 in a Bombay Stock Exchange market down 1%.
Monday, Infosys said that it is constantly working to improve its policies and practises "to ensure that our internal controls are sound."
The company, which denies any wrongdoing, said it has provided all the information requested by homeland security. It declined to elaborate.
The development is a setback for the Nasdaq and Mumbai-listed software exporter, which is already facing a lawsuit and an inquiry by a U.S. Senate subcommittee for alleged violation of work visa rules.
U.S. authorities are investigating whether Infosys abused a temporary business visa program to get employees into the country for long-term assignments.
In February, a principal consultant at Infosys filed a lawsuit alleging that the technology major sought his help to circumvent U.S. law.
Subsequently, the company received a subpoena from a grand jury in the United States District Court for the Eastern District of Texas requiring it to provide information regarding sponsorships for, and uses of, short-term business visas.
The issue of visas has been brewing for a while.
Recently, the Indian government said it would file a complaint with the World Trade Organization against a 2010 U.S. law that increased visa fees for foreign skilled workers.
The law targets companies which operate in the U.S. with more than 50% of employees on work visas, by nearly doubling the fee to $4,500 per visa application.
It has mainly affected Indian firms such as Infosys and Wipro Ltd., which bring engineers and programmers from India to work in their U.S. offices. They have paid an estimated $200 million in extra fees.
--By Dhanya Ann Thoppil, Dow Jones Newswires; +91-9886929464; firstname.lastname@example.org