Infosys row returns: Narayana Murthy wants Panaya report to be made public, co rejects demand

NR Narayana Murthy has sparked a fresh row asking Infosys to make public an audit report it had commissioned on the acquisition of Israeli firm Panaya and other allegations about corporate governance at the country's second largest software exporter, according to a report in the Business Standard.

However, the company has rejected the demand, the report said. The internal audit was conducted by Gibson, Dunn & Crutcher, a global consultancy firm. Infosys has made public only the summary of the findings.

NR Narayana Murthy. Reuters

NR Narayana Murthy. Reuters

Murthy, according to the report, has written to the Infosys board asking why did senior executives such as Ritika Suri quit the company soon after the report gave a clean chit. Suri, who led the acquisition of Israeli automation technology firm Panaya for Infosys, was based out of the US. She quit the company on by mid-July.

A former executive at SAP, Suri was brought into Infosys by CEO Vishal Sikka in September 2014. She was later elevated as the EVP (Corporate Development and Ventures).

Infosys announced buying the Israeli automation technology company for $200 million or Rs 1,250 crore in cash in February 2015.

Apart from Suri, Anirban Dey (global head and chief business officer of Edge products) and Yusuf Bashir (MD of Infosys Innovation Fund) also quit the company over the last few months.

Panaya deal history

The deal became controversial after two anonymous letters in February 2017 alleged wrongdoing in some of Infosys' acquisitions, including Panaya. The letters had also raised issues such as improper contracting and CEO compensation as well as expenditures.

After the allegations, the company had instituted an independent forensic investigation by US law firm Gibson Dunn & Crutcher. The results of the probe that came out last month, gave a clean chit to Suri on the deal.

On the acquisition, Gibson Dunn & Crutcher had said it did not find any evidence of "inappropriate contracting" or that the mergers and acquisitions team failed to obtain appropriate approvals.

"Gibson Dunn and Control Risks have now completed their detailed and extensive Independent Investigation and as they have described in the attached document, they did not find any evidence whatsoever of wrongdoing," Infosys had said in a statement.

Gibson Dunn & Crutcher, in its report, said it had found no evidence to support allegations regarding wrongdoing by the company or its directors and employees.

It added that there were no conflicts of interest or kickbacks and the approvals required for the acquisitions were obtained with regard to the Panaya acquisition.

"...Thorough due diligence was conducted, the valuations of the target companies done by an outside financial advisor were reasonable, and the purchase prices were within the range of values determined by that advisor," it had said.

It also said it had found no evidence that Sikka had received excessive variable compensation or incurred unreasonable expenses for security, travel and the Palo Alto office.

With inputs from PTI

Updated Date: Aug 04, 2017 09:48 AM

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