Infosys Chairman Nandan Nilekani on Tuesday said the company's audit committee will conduct an independent investigation on whistleblower allegations of CEO Salil Parekh and CFO Nilanjan Roy indulging in "unethical practices" to boost short-term revenue and profits.
The committee began consultation with independent internal auditors EY, and has retained law firm, Shardul Amarchand Mangaldas & Co. to conduct an independent investigation, Nilekani noted in his statement to the stock exchanges.
Nilekani said one board member had received two anonymous complaints on 30 September, 2019 - one dated 20 September, 2019, titled “Disturbing unethical practices” and an undated note with the title, “Whistleblower Complaint”.
He said both had been placed before the audit committee on 10 October, 2019, and before the non-executive members of the board the following day.
On the BSE, shares of the company plunged up to 14 percent to trade around Rs 663 in early trade on Tuesday.
Full text of Nandan Nilekani's statement:
We are providing an update on the steps taken in response to the anonymous whistleblower complaints (“Complaints”) that the Company disclosed on 21st October, 2019. One Board member received two anonymous complaints on 30 September, 2019 one dated 20 September, 2019 titled “Disturbing unethical practices” and the second undated with the title, “Whistleblower Complaint.” Pursuant to our whistleblower practice we have placed both Complaints before the Audit Committee on 10 October, 2019 and before the non-executive members of the Board on 11 October, 2019. These Complaints are being dealt with in an objective manner. The undated whistleblower complaint largely deals with allegations relating to the CEO’s international travel to the US and Mumbai.
Additionally, on 16 October, 2019 the Company was made aware of a letter dated 3 October, 2019 which was purportedly written to the Office of Whistleblower protection program, Washington D.C. This letter refers to the 20 September, 2019 complaint, and to emails and voice recordings in support of the allegations. Although we have not been provided any of the emails or voice recordings, we will ensure that the generalized allegations are investigated to the fullest extent. Additionally, to ensure
independence in these investigations the CEO and CFO have been recused from this matter.
Post the Board Meeting of 11 October, 2019 the Audit Committee began consultation with the independent internal auditors (Ernst &Young) on terms of reference for their prima facie investigation. The Audit Committee has now retained the law firm of Shardul Amarchand Mangaldas & Co. (21 October, 2019), to conduct an independent investigation. The Board, in consultation with the Audit Committee, will take such steps as may be appropriate based on the outcome of the investigation.
Our statutory auditors, Deloitte, India have also been completely updated on this matter post the Board meeting of 11 October, 2019.
Because the investigation is ongoing, 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 highest standard of corporate governance and protect the interests of all stakeholders.
(With PTI inputs)
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Updated Date: Oct 22, 2019 12:41:18 IST