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Will ensure Infosys shuts US ops: Jack Palmer

Padma Swaminathan, Yahoo! India Finance

Bangalore: Leading IT companies are spending sleepless nights on the recent visa allegations against them.

Infosys, Tata Consultancy Services (TCS), Wipro and Cognizant Technologies, have been at the receiving end in the last couple of months. Two individual lawsuits have been filed against Infosys over the last six months alleging misuse of the H1B visa and age discrimination in local hiring, said a report published in The Economic Times.

Though the company refused to comment on this issue when asked during their press meet in Mysore last month, the IT major has a long legal battle ahead.

Jack Palmer who has accused the company of large scale visa fraud in the US is not ready for an out of court settlement. A report in Economic Times says that Palmer wants the case to go to court and see it to the end after Infosys said last week his claims were false and exaggerated.

He also said Indian companies were benefiting at the expense of the American economy, a charge the Indian IT industry disagrees with. Indian software and services industry body NASSCOM has said in the past that the cost savings they provide help make U.S. firms more competitive.

The case threatens to affect Infosys's North American businesses from where it gets 60 per cent of its revenue.

Earlier last week, the IT bellwether came hard against the whistleblower, calling Palmer's commentary "full of inaccuracies, exaggerations and falsehoods."

"The commentary submitted by Palmer (through US Senator Charles Grassley) to the senate judiciary subcommittee on immigration, refugees and border security, is full of inaccuracies, exaggerations and falsehoods," said Paul N Gottsegen, chief marketing officer of Infosys, in a statement.

Infosys, which has been caught in a whirlwind of visa issues that was affecting its relationship with customers, said it would strive to see that the company's integrity and compliance with law were not comprised.

But it is just not Infosys that is at the receiving end. Even MNCs like Cognizant have been accused of misusing the visa rules. At the ground level, companies are getting hit badly with intense scrutiny and visa rejections. V Balakrishnan, CFO, Infosys Ltd had recently told us in an interview that L1/H1B visa rejections had gone up by almost 50 per cent.

However, the problem is more than what has been reported. A columnist here clearly states that there is some flaw in the visa rules. So are the companies interpreting it wrongly or are their lawyers using this loophole to get more visas? No one has clarified on this stance but this case is definitely going to have a major impact on the Indian IT  companies.