Whistleblower plaint: Infosys wants probe to be completed in 2 weeks

Law firm Shardul Amarchand Mangaldas and consultancy EY has been tasked to probe the whistleblower charges.

Agencies
Infosys is also facing investigations by the US SEC and the Sebi after the whistleblowers alleged that Parekh and Roy were using aggressive accounting strategies and potentially hiding information from auditors to boost revenue and profit margins.
MUMBAI | BENGALURU: Infosys has directed law firm Shardul Amarchand Mangaldas and consultancy EY to complete investigations into whistleblower allegations of accounting malfeasance within the next fortnight, according to a person directly aware of developments at the software services major battling to return to a business-as-usual mode.

Chief executive officer Salil Parekh and CFO Nilanjan Roy — the two executives accused of financial malpractices by the anonymous group “ethical employees” — have been recused from the investigations, but they have been tasked with keeping the company on an even footing and “are meeting clients and investors to allay fears”, the person said.

“The (company) has asked investigators to try and comp lete (the process) as soon as possible, as short as two weeks,” said the source. The Bengaluru-headquartered company will then “follow the rule book, whatever be the result.” the person added.


India’s second largest software exporter is also facing investigations by the US Securities and Exchange Commission and the Securities and Exchange Board of India after the whistleblowers alleged that Parekh and Roy were using aggressive accounting strategies and potentially hiding information from auditors to boost revenue and profit margins.
g2

“While we will take a detailed look into the allegations to ensure that all serious accusations are examined closely, we are also clear that “shoot and scoot whistleblower allegations do not harm business continuity,” said a top official close to the development.

The NYSE- and BSE- listed company is also facing a class action law suit in New York. On Thursday, the Infosys stock closed at Rs 635.40, down more than 2%, on BSE. The company's 52-week low was Rs 600.65.
ADVERTISEMENT

“The focus is to ensure a speedy investigation and to not let this issue derail the growth momentum that Infosys has seen over the past year. You should not have distractions in a challenging business environment,” said a second person aware of the issue. Infosys declined to comment on ET’s queries.

People aware of the developments within the software services powerhouse, once regarded as the industry bellwether, said there is rising concern over the spate of allegations that have roiled the company in recent years. “Disgruntled elements keep using the whistleblower policy to cause reputational damage and derail Infosys time and again,” said one person who spoke to ET on the condition of anonymity.

Corporate governance experts are also of the view that there is a clash of cultures within the nearly four-decade-old company. Shriram Subramaniam, managing director of proxy advisory firm InGovern said, “The conservative mindset is embedded in Infosys. So any aggressive behaviour or practice may trigger angst.”

In 2017 Infosys founder NR Narayana Murthy had raised concerns over corporate governance at the company, which culminated in then CEO Vishal Sikka resigning from the company.
Download
The Economic Times Business News App
for the Latest News in Business, Sensex, Stock Market Updates & More.
Download
The Economic Times News App
for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
READ MORE
ADVERTISEMENT

READ MORE:

LOGIN & CLAIM

50 TIMESPOINTS

Related Companies

More from our Partners

Loading next story
Text Size:AAA
Success
This article has been saved

*

+