The Audit Committee of Infosys has given the company's top management a clean chit in the whistleblower allegations that leaked in September 2019. Infosys, on Friday, said independent investigations found no evidence of any wrongdoing in any of the charges made in anonymous letters. A combative Nandan Nilekani, Co-founder and Non-Executive Chairman of the Board, said the company has come out stronger from the episode, that the CEO (Salil Parekh) and CFO (Nilanjan Roy) are thorough professionals, and that there was no way of ascertaining whether allegations were made by genuine employees or outsiders. In other words, the whistleblowers may not have been insiders.
The whistleblowers wrote to the Infosys Board of Directors and the US SEC alleging unethical practices by the top management. The allegations broadly fell in four buckets: questionable accounting standards; ethics of top management; disclosure standards and a racial slur. While the whistleblower letter was dated September 20, the news broke and became public only a month later - on October 21. Investors dumped the stock. Infosys' shares slid over 16 per cent on October 22, wiping out Rs 53,000 crore of its market cap.
The investigators, Nilekani informed during a press conference in Bengaluru, conducted 128 interviews with 77 people, reviewed 210,000 electronic documents and processed about eight terabytes of data. "It was a very exhaustive investigation. Investigators got open access," he said. "The CEO and the CFO have emerged stronger...they are thorough professionals," he added.
Nilekani said that under CEO Salil Parekh, the company has changed for the better. "There is a sense of alignment and purpose. It is important that we move forward now. Everyone in Infosys' has emerged stronger from this episode," he reiterated.
The chairman agreed that the investigation is indeed a distraction particularly since it coincided with Infosys having to close its books for the quarter. "It is a credit to the people of Infosys, the leadership, the value system, the finance department. They had to deal with the challenge of closing the books for the third quarter and cooperating with the investigation. They are people of high integrity - the report has validated that," he said.
Nilekani further said that the company is cooperating with foreign regulators looking at the allegations.
The chairman hinted that whistleblower policies can be weaponised and asked the media to investigate if the allegations came from Infosys employees or outsiders. He alluded to the RTI - it has been used by one person to figure out why a second person has been promoted. Every system, he said, has distortions. "If there is somebody weaponising it, we cannot do much about it," he said. "Our finance department has high ethical standards. Find out who has done it. How do you know they are employees of Infosys?" he told the media present at the conference.