New Delhi: A whistleblower group that calls itself ‘Ethical Employees’ has complained to the Infosys board of directors that its CEO Salil Parekh has indulged in “unethical practices” and fudged the company’s financial numbers.
Copies of the letter authored by the anonymous group, who claim to be Infosys employees, were recently sent to the US Securities and Exchange Commission and the company’s board.
The story was first reported by the Economic Times on Monday morning. The Wire has also reviewed the letter, but could not independently verify any of the allegations that have been made.
“He (Parekh) directs them to make wrong assumptions to show margins. CFO is compliant and he prevents us from showing in board presentations large deal issues…Several billion-dollar deals of last few quarters have nil margin,” the letter states.
“Please ask auditors to check deal proposals, margins, undisclosed upfront commitments made and revenue recognition,” the letter stated.
In a statement put out on Sunday night, Infosys has said that the whistleblower complaint will be examined as per established practice.
“The whistleblower complaint has been placed before the Audit Committee as per the Company’s practice and will be dealt with in accordance with the Company’s whistleblowers policy.”
Over the last two years, the IT services major has faced questions over corporate governance, with markets regulator SEBI even setting up a probe committee to enquire into other allegations made by a previous whistleblower.
Following differences between the board and former boss Vishal Sikka, the latter stepped down and was replaced by current CEO Salil Parekh. Company co-founder Nandan Nilekani also made a dramatic return to the company and took over as non-executive chairman.
Salil Parikh. Photo: Facebook/Infosys
New allegations?
This time, an anonymous whistleblower group claims it has “recordings and mails” to show that Parekh has over-looked reviews and approvals for large deals.
Specifically, the complaint alleges that the company’s top management has presented a rosy financial picture by ignoring visa costs in one quarter, and not immediately recognising $50 million in reversals in one contract.
It has also alleged that Parekh and CFO Nilanjan Roy were pressuring the finance team to show more profits in their treasury management by taking risks and making changes to policies.