Infosys row: Now another whistleblower accuses CEO Salil Parekh of financial irregularities, seeks action to recover money

On 22 October, Nilekani had said the Infosys' audit committee would conduct an independent investigation on whistleblower allegations of Parekh and Roy.

FP Staff November 12, 2019 15:24:21 IST
Infosys row: Now another whistleblower accuses CEO Salil Parekh of financial irregularities, seeks action to recover money
  • The whistleblower, claiming to be a staff of Infosys' finance department, says that his identity cannot be revealed at this juncture apparently fearing retaliatory actions

  • The whistleblower alleged that Parekh goes to Infosys' Bengaluru office twice a month and the visits costs the company Rs 22 lakh

  • In October this year, a whistleblower group had accused Parekh and chief financial officer Nilanjan Roy of indulging in unethical practices

Even as the inquiry into the alleged irregularities are underway at Infosys, another whistleblower from the global IT major has accused Chief Executive Officer (CEO) Salil Parekh of misdeeds. The whistleblower reportedly called up Infosys chairman and the board of directors to look into the matter and take action against Parekh, according to an IANS report.

"Though it is a year and 8 months since Parekh joined the company, he operates from Mumbai in violation of the condition that the CEO has to be based in Bengaluru and not Mumbai. What is stopping the board to insist on his movement to Bengaluru," the report said, citing the whistleblower's unsigned and undated letter. It is the second such letter against Parekh, to Infosys chairman and co-founder Nandan Nilekani and independent directors on the board.

Infosys row Now another whistleblower accuses CEO Salil Parekh of financial irregularities seeks action to recover money

Representational image. Reuters.

The whistleblower, claiming to be a staff of Infosys' finance department, said that his identity could not be revealed at this juncture apparently fearing retaliatory actions, the IANS report said.

The whistleblower alleged that Parekh goes to Infosys’ Bengaluru office only twice a month, said a report in Moneycontrol. "These visits cost the company Rs 22 lakh towards airfare and local transportation. Four business-class tickets per month plus home to airport drop in Mumbai, airport pick-up in Bengaluru and drops on the return journey," the report said, citing whistleblower's allegation in the letter.

In October this year, a whistleblower group had accused Parekh and chief financial officer (CFO) Nilanjan Roy of indulging in unethical practices. The whistleblower's group, Ethical Employees, had sent a complaint to the US Securities and Exchange Commission and the Infosys board against the duo.

The employees' group in a letter dated 22 September 2019 had claimed that they had the voice recordings of Parekh and Roy to prove the allegations.

The letter alleged that several billion-dollar deals in the past few quarters had no margin and asked the IT major to examine the deal proposals, margins, undisclosed upfront commitments made and revenue recognition with the help of auditors.

Soon, Infosys had, in a statement, said it would go through the allegations levelled by the employees' group, the company said in a statement.

On 22 October, Nilekani had said the company's audit committee would conduct an independent investigation on whistleblower allegations of Parekh and 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.

On 23 October, markets regulator Securities and Exchange Board of India (SEBI) began its probe into alleged non-disclosure of price-sensitive information by Infosys' management and also corporate governance lapses in the wake of serious allegations levelled by a whistleblower, while it is also examining possible insider trading in the company's securities.

Later the government also swung into action. The Ministry of Corporate Affairs (MCA) sought details on the whistleblower complaint to the US Securities and Exchange Commission (SEC) and is keeping a close watch.

On Monday, there was a report that Infosys was considering appointing law firms JSA Law or Khaitan & Co in a bid to strengthen the investigation into allegations by whistleblowers against top company executives.

Whistleblower complaint against Infosys earlier, too

In 2017, a whistleblower report had alleged wrongdoings by Infosys and some officials in the $200 million acquisition of Israeli automation technology firm Panaya by the Bengaluru-based IT services firm. An internal audit committee set up by Infosys later found no evidence supporting the whistleblower's allegations.

However, Infosys founder N R Narayana Murthy had demanded that the full report by Gibson, Dunn and Crutcher on these whistleblower allegations be made public.

Later in October 2017, the Infosys board—under its then new chairman Nandan Nilekani—gave a clean chit to the controversial Panaya acquisition, saying there was no merit in the allegations of wrongdoing.

With inputs from agencies

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