L&T Tech shares decline 1% on $9.9-mn visa fraud claims in US

The share price of L&T Tech was down 1 percent on Tuesday after the company agreed to cough up $9.93 million to the US. Department of Justice to settle allegations of underpaying visa fees between 2014 and 2019.

The US Department of Justice has alleged the company of acquiring inexpensive B-1 visas, instead of more-expensive H-1B visas in violation of the False Claims Act.

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The B-1 does not permit foreign nationals to perform paid labour in the US and generally costs $200 to $300, with no limit on the number of visas that could be issued, while the H-1B allows paid labour but costs $4,000 to $6,000 and is limited by an annual cap of 65,000 for foreign nationals, with an additional 20,000 H-1B visas annually for those in specialised knowledge occupations.

The investigation that led to the settlement was initiated through the filing of a whistleblower complaint, and L&T Technology has denied liability while cooperating with the US in this matter. The company has taken significant steps to ensure compliance with visa laws, according to the department’s statement.

Also Read: Nomura initiates coverage on L&T Tech with ‘reduce’ rating, cuts target price, expects 100 bps margin contraction

Earlier last month, foreign brokerage firm Nomura initiated coverage on the company with a ‘reduce’ rating and a target price of Rs 3,050, making a downside of around 14 percent from current levels. The brokerage expects around 4 percent USD revenue CAGR over FY22-25 with a 100 bps margin contraction, leading to a 15.2 percent earnings per share CAGR.

In the last year, the market capitalisation of the company declined over 25 percent, and around 2 percent last month. At 10.24am, the scrip was trading 0.88 percent lower on the NSE at Rs 3,561.85 with the benchmark Nifty IT trading down 0.066 percent at 29,022.30 points.