Cognizant Technology shares trade at 23-month low, on US investigation
Investors dampened the shares of Cognizant Technology Solution on NASDAQ , after a US investigation was held in the company related to Foreign Corrupt Practices Act.
Shares of Cognizant Technology, was trading at 23-month low at $ 47.22 down by 14.55%. The lowest level was seen in October, 2014 were it shares stood at $ 48, since then this would be the first time, Cognizant has dropped below $ 50-mark.
The company has voluntarily notified the United States Department of Justice (the “DOJ”) and United States Securities and Exchange Commission (the “SEC”) and is cooperating fully with both agencies.
Cognizant said, “The company is conducting an internal investigation into whether certain payments relating to facilities in India were made improperly and in possible violation of the US Foreign Corrupt Practices Act and other applicable laws,” said a statement issued to the US stock exchange.”
Further it added, “The investigation is being conducted under the oversight of the Audit Committee, with the assistance of outside counsel, and is currently focused on a small number of company-owned facilities.”
It also pointed out concerns on how this action will impact on their growth ahead.
“The internal investigation is in its early stages, and the company is not able to predict what, if any, action may be taken by the DOJ, SEC or any governmental authority in connection with the investigation or the effect of the matter on the Company’s results of operations, cash flows or financial position” it said.
Such development is expected to add further pressure on the Cognizant, has it is expected to grow at the slowest pace since 1996.
In August , Cognizant, which follows a January-December fiscal year, for the second time this year, cut its full-year revenue growth forecast sharply to 8.5-9.5%, half the pace at which revenue expanded last year.