August 21, 2012 / 5:57 AM / 6 years ago

UPDATE 2-Infosys rises after whistleblower lawsuit dismissed

* U.S. Judge throws out employee Jack Palmer's lawsuit
    * Lawsuit, in Alabama, alleged retaliation for
    * Second whistleblower's claims also unfounded, CEO says
    * Shares rise as much as 3.7 pct to highest in six weeks

 (Adds Infosys CEO comments, updates share price)
    By Harichandan Arakali 
    BANGALORE, Aug 21 (Reuters) - Infosys Ltd shares
rose to their highest level in six weeks on Tuesday after a U.S.
court dismissed harassment charges filed by an employee in the
United States, the biggest market of the Indian outsourcing
    While a second and similar lawsuit remains, those claims too
are unfounded, S.D. Shibulal, chief executive officer of
Infosys, India's second-largest software services exporter, told
    In the dismissed lawsuit, Jack Palmer, an Infosys employee
in the United States, said he suffered retaliation from the
company after accusing it of misusing U.S. B1 visas.
    In a U.S. election year, approval and use of work visas for
overseas employees sent to client locations in the world's
largest economy by Indian outsourcing companies have come under
intense scrutiny.
    Corporations including Indian outsourcing services providers
use thousands of visas to bring in employees mainly from India,
a practice seen by some as hurting the American job market.
    Palmer's lawyer could not immediately be reached by Reuters
for a comment.
    "The court ruled that this case doesn't even have enough
merit to be tried," Shibulal said. "We are very pleased to
consider this matter officially closed ... this is a vindication
of our position that we did not retaliate against anyone."
    Investors cheered the development with Infosys shares rising
as much as 3.7 percent to a six-week high before ending up 2.5
percent, while the main Mumbai market close 1 percent
    Shares in Infosys shares, which the market values at about
$25 billion, have fallen 13 percent so far this year,
underperforming the technology sector index which is
down 1 percent, on worries about sluggish earning growth in a
weak global economy.
    The U.S. court's "decision is a short-term positive," Wells
Fargo senior analyst Edward S. Caso wrote in a note to clients
after the verdict.
    The ruling, by U.S. judge Myron H. Thompson, confirmed that
Jack Palmer's claims were "completely unfounded", Infosys said
in a statement.
    However, Wells Fargo's Caso said that the issue remained
unresolved as a second similar case and a separate investigation
of Infosys' use of visas were pending.
    Satya Dev Tripuraneni, an American ex-employee, said he was
harassed by his supervisor after he accused Infosys of visa
fraud, according to a lawsuit filed on Aug. 2 in the federal
court for the Northern District of California. 
    "I think we've done the internal investigations. We have
found that the claims are completely unfounded, our lawyers are
preparing for the defence," Infosys CEO Shibulal said on
    In May, Infosys said it and some of its employees had been
named in an investigation by a grand jury of the U.S. District
Court for the Eastern District of Texas and the investigation
was looking into the company's use of various visas.
    Separately, the U.S. Department of Homeland Security is also
investigating errors in I-9 immigration documentation filed by
Infosys, the company has said. Shibulal did not provide an
update on these investigations on Tuesday. 

 (Additional reporting by Manoj Dharra in Mumbai; Editing by
Rafael Nam and David Cowell)
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