A subsidiary of Indian outsourcing firm Infosys Technologies is being sued over claims it improperly handled customer data.

US company The Buying Triangle claims Infosys BPO has been holding its customer data to ransom following the cancellation of an outsourcing contract in 2006.

The Buying Triangle, which provides other companies with spending management services, last year contracted out its data analysis and application support functions for a software tool to Infosys BPO, then known as Progeon.

The US firm said it cancelled the contract after discovering what it termed security problems with Infosys BPO’s work. The Buying Triangle says Infosys BPO failed to return some customer data after the contract ended.

Infosys BPO is being asked to pay $600,000 (£298,000) in damages.

Infosys is refusing to comment on the specific charges, but the firm says the lawsuit is without merit and it is seeking to have the case dismissed. The Indian company has also filed its own countersuit.

‘Infosys will not respond in detail to the various allegations other than to note that it denies the complaint’s allegations and intends to vigorously defend itself against these meritless claims,’ the company said in a statement.

‘Protecting our client’s data and intellectual property is central to Infosys BPO’s corporate values and ethics and Infosys BPO’s relationship with The Buying Triangle is no exception. Specifically, Infosys BPO states that it has already returned to The Buying Triangle its client and proprietary information.’