Infosys terms negative media coverage, activist investors as risk factors
“Negative media coverage and public scrutiny may affect the prices of our equity shares ,” said the IT major in a regulatory filing to the US Securities Exchange Commission.business Updated: Jun 13, 2017 23:43 IST
Terming negative media coverage and actions of activist shareholders as risk factors, global software major Infosys on Tuesday informed the market regulators that such activities could adversely affect its stock prices and execution of strategies.
“Negative media coverage and public scrutiny may affect the prices of our equity shares and ADSs (American Depository Shares), while actions of activist shareholders may affect our ability to execute strategic priorities,” said the IT major in a regulatory filing to the US Securities Exchange Commission (SEC) under ‘risk factors’.
Similar filings were made to the Indian bourses - BSE and NSE - along with its annual report for fiscal 2016-17 ahead of its 36th annual general meeting here on June 24.
Claiming that media coverage and public scrutiny of its business practices, policies and actions had increased in the past 12 months, the firm said negative media coverage in relation to its business, board or directors or senior management may adversely impact our reputation.
“Responding to allegations in the media may be time consuming and could divert attention of our directors and senior management away from business. Any unfavourable publicity may also impact investor confidence,” it said.
Noting that such activities could interfere with its ability to execute strategic plans, the company said they may also incur significant legal fee and public relations costs.
“The perceived uncertainties as to our future direction could affect client and investor sentiment, resulting in volatility in the price of our securities,” it said in the filing.
The country’s second largest exporter of software services has been in the news since February following serious differences between its co-founders and the board of directors over corporate governance issues, increase in compensation for senior executives and high severance package to its former chief financial officer.