Left Menu
Development News Edition

Infosys in damage control mode after complaints of unethical practices, stock down by 14 pc

Software major Infosys said on Tuesday it has engaged law firm Shardul Amarchand Mangaldas and Company to conduct an independent investigation on two complaints by some employees about unethical measures to boost profits.

ANI | Bengaluru (Karnataka) | Updated: 22-10-2019 11:15 IST | Created: 22-10-2019 11:15 IST
Infosys in damage control mode after complaints of unethical practices, stock down by 14 pc
Infosys said it is committed to uphold the highest standard of corporate governance. Image Credit: ANI

Software major Infosys said on Tuesday it has engaged law firm Shardul Amarchand Mangaldas and Company to conduct an independent investigation on two complaints by some employees about unethical measures to boost profits. An anonymous group calling itself 'ethical employees' alleged in a letter to the board of Infosys and the US Securities and Exchange Commission (SEC) that company's Chief Executive Officer (CEO) Salil Parekh and Chief Financial Officer (CFO) Nilanjan Roy took disturbing unethical measures to boost profits and short-term revenue.

The complainants said they have emails and voice recordings to substantiate the claims. "These complaints are being dealt with in an objective manner," said Chairman of Infosys Ltd Nandan Nilekani. "The undated whistleblower complaint largely deals with allegations relating to the CEO's international travel to the United States and Mumbai," he said in a statement.

Nilekani said the company's statutory auditors Deloitte India has also been completely updated on this matter post the board meeting of October 11. "Although we have not been provided any of the emails or voice recordings, we will ensure that the generalised allegations are investigated to the fullest extent. Additionally, to ensure independence in these investigations the CEO and CFO have been recused from this matter."

Because the investigation is ongoing, said Nilekani, there will be no further comment so that investigation may be conducted in a thorough and objective manner. "At the appropriate time, we will provide a summary of the investigations results. The board is committed to uphold the highest standard of corporate governance and protect the interests of all stakeholders." In one of the letters, the whistleblower said that Parekh and Roy were pressuring the finance team to show more profits in their treasury management by taking risks and making changes to policies.

"He (Parekh) directs them to make wrong assumptions to show margins. Several billion-dollar deals of the last few quarters have nil margin. Please ask auditors to check deal proposals, margins, undisclosed upfront commitments made and revenue recognition," the letter said. "In large contracts like Verizon, Intel, joint ventures in Japan, ABN AMRO acquisition, revenue recognition matters are forced, which are not as per accounting standards," the letter stated.

At 11 am on Tuesday, Infosys was trading 14.01 per cent lower at Rs 660.30 per share. (ANI)


TRENDING

OPINION / BLOG / INTERVIEW

Uganda COVID-19 response: Was off to a good start but reopening dwindled prospects

Uganda has shown success in using health information to enhance efficiency of disease surveillance, reporting and monitoring. The success, however, has critical challenges confronting it as the country resumes normal activities....

New farm bills in India: Focusing on farms or farmers?

... ...

Kenya’s COVID-19 response: Chaos amid lack of information

Confusing numbers and scanty information on how effective curfews and lockdowns have been in breaking transmission have amplified coordination and planning challenges in Kenyas response to COVID-19. Without accurate data, it is impossible t...

Farkhad Akhmedov: Calculating the price of impunity from the law

In insistences such as the battle over the Luna, Akhmedov has resorted to extreme legal machinations to subvert the High Courts decision and keep his assets from being seized. ...

Videos

Latest News

Soccer-Barcelona overcome Juve as Morata has three goals disallowed

Ousmane Dembele struck early and Lionel Messi converted a late penalty as Barcelona won 2-0 at Juventus in the Champions League on Wednesday after Alvaro Morata had three goals disallowed for offside for the Serie A side.Dembele struck with...

Democrats raise concerns about U.S. Postal delays ahead of election

Democrats in Congress on Wednesday said reported delays in mail deliveries in some U.S. cites could jeopardize delivery of ballots ahead of next weeks presidential election.U.S. District Judge Emmet Sullivan in Washington late Tuesday order...

U.S. rejection throws WTO leadership race into confusion

The World Trade Organizations bid to select a new leader was plunged into uncertainty on Wednesday after the United States rejected the Nigerian woman proposed as the global trade watchdogs next director-general. Just six days before the U....

Hurricane Zeta slams Louisiana with high winds, 'life-threatening' surge

Hurricane Zeta smashed into Louisiana on Wednesday with 110-mile-per-hour 175 kph winds and what government trackers called a life-threatening storm surge, the third hurricane to hit the U.S. Gulf Coast state this year.Zetas extremely dange...

Give Feedback