On 23 October 2026 the U.S. Department of Justice opened an investigation into Infosys Ltd.’s classification of certain H‑1B employees. The development obliges Indian listed issuers to disclose foreign government investigations that could have a material adverse effect under Section 134(3) of the Companies Act, 2013. Infosys and its U.S. subsidiaries now face the risk of a disclosure breach and possible penalties. The requirement treats immigration‑related probes like any other regulatory inquiry for reporting purposes.

Full News Breakdown

The investigation was prompted by concerns that the firm’s immigration petitions did not accurately reflect the duties and wage levels of some H‑1B workers. The disagreement centres on whether the filings satisfy the standards set by U.S. immigration law, and Infosys has responded by launching an internal review while continuing discussions with the DOJ.

• Court: U.S. Department of Justice

• Date: 23 October 2026

• Statutes Cited: Immigration and Nationality Act; Companies Act, 2013

• Key Provisions: INA § 214; Companies Act § 134(3)

• Primary Legal Issue: Compliance of H‑1B classifications with INA and disclosure trigger under Indian law

• Practical Outcome: Infosys disclosed uncertainty and began an internal inquiry

How Does This Affect You?

Earlier, firms were unsure whether a foreign immigration probe required a “government investigation” entry in Indian statutory filings. The DOJ action confirms that any investigation that could materially affect earnings must be reported under the Companies Act. Consequently, companies now treat immigration‑related investigations as reportable events, increasing certainty of disclosure obligations and exposing non‑compliant entities to heightened regulatory scrutiny.

For Lawyers & Advocates

• Amending the “Government Investigation” schedule in quarterly and annual returns would capture any immigration‑related probe, referencing Section 134(3) and the material‑impact threshold.

• A forensic audit of H‑1B petitions filed in the past three fiscal years would highlight discrepancies in job‑role descriptions and prevailing wage determinations, which generate immigration penalties and disclosure risk.

• Including amendment clauses in client service agreements that obligate the client to notify counsel of any U.S. regulatory inquiry within five business days would facilitate timely statutory disclosures.

• The DOJ inquiry can serve as a factual basis to argue for reduced penalties in future INA enforcement actions, emphasizing the client’s proactive internal investigation and cooperation.

• A cross‑border compliance committee that reviews foreign investigations quarterly would ensure that any new probe is evaluated against the material‑impact test before the next filing deadline.

For Law Students

The case illustrates how courts balance regulatory enforcement with corporate disclosure duties. The core doctrine is the intersection of foreign investigative authority and domestic reporting obligations.

The decision provides an opportunity to examine:

• Corporate governance under the Companies Act, 2013

• Cross‑border regulatory compliance

• Immigration law and the INA

• Securities disclosure standards in India

Comparable precedents include Satyam Computer Services Ltd. v. SEBI (2009) and United States v. Microsoft Corp. (2020). Comparing them shows how domestic disclosure regimes respond to foreign enforcement actions and clarifies the threshold for materiality in cross‑jurisdictional contexts.

For Businesses

• Revising H‑1B filing templates to include a compliance checklist that aligns job duties with wage levels would help IT services firms prevent future classification disputes.

• Approving a policy that mandates the Chief Financial Officer to review all foreign investigations before the close of each reporting period would ensure timely disclosure.

• Integrating immigration compliance checks into the quarterly financial close workflow would link identified gaps directly to the statutory disclosure schedule.

Key Takeaways

• Foreign government investigations that could affect earnings now fall within the mandatory disclosure regime of Section 134(3) of the Companies Act, 2013.

• Corporate counsel must add immigration‑related risk assessments to the “Government Investigation” entry in every statutory filing.

• Regulators can sanction non‑disclosure of such probes as a breach of securities law, expanding the enforcement toolkit beyond domestic matters.

• Watch for the SEBI‑proposed amendment to the disclosure schedule expected in early 2027, which may lower the materiality threshold for foreign investigations.

• CFOs should convene a compliance review before the 31 December 2026 filing deadline to certify that all immigration inquiries are properly reported.

Source: Infosys in discussions with US DOJ over H-1B visa probe, conducting own inquiry