Infosys Chairman Nilekani recuses CEO Parekh, CFO Roy from investigation of allegations
BusinessToday.In October 22, 2019
A day after scathing allegations of "unethical practices", Infosys Ltd has launched a thorough investigation and has recused Chief Executive Officer Salil Parekh and Chief Financial Officer Nilanjan Roy to ensure impartial probe. In a statement attributed to Nandan Nilekani, Chairman of Infosys Limited, the company told the stock exchanges that it had taken appropriate actions after the anonymous whistleblower complaints had surfaced in September.
The statement said both the complaints made by the group called 'Ethical Employees' had been placed before the Infosys audit committee and its non-executive members. "One board member received two anonymous complaints on September 30, 2019, one dated September 20, 2019, titled 'Disturbing unethical practices' and the second updated with the title, 'Whistleblower Complaint'," says the statement.
The company said as per its whistleblower practice, the company placed "both complaints before the audit committee on October 10, 2019, and before the non-executive members of the Board on October 11, 2019." The company said the complaints were being dealt with in an "objective manner", and to ensure independence in these investigations, "the CEO and CFO have been recused from this matter".
Infosys said the company was also first made aware of a letter dated October 3, 2019, which was purportedly written to the Office of Whistleblower Protection Programme, Washington DC. "This letter refers to the September 20, 2019 complaint, and emails and voice recordings in support of the allegations. Although we have not been provided with any of the emails or voice recordings, we will ensure that the generalised allegations are investigated to the fullest extent," the statement said.
The company said after the October 11 board meeting, the audit committee had started consultations with the independent internal auditors (Ernst &Young) to investigate the matter. The audit committee of the company on October 21 retained the law firm of Shardul Amarchand Mangaldas & Co to conduct an independent investigation on the matter, the statement said, adding that the board would take appropriate steps after the audit committee investigation.
Infosys share price opened 16 per cent lower on BSE and NSE today as the IT firm faced allegations of 'unethical' practices to generate more profit and revenue. Infosys share price was stuck in the lower circuit of 10 per cent, losing 76 points to Rs 691 level compared to the previous close of Rs 767.75 on BSE. In a complaint letter to the board of Infosys and the US Securities and Exchange Commission (SEC), the anonymous employees' group had claimed they were asked not to "fully recognise costs like visa costs" in last quarter to show more profit. And when the auditor pointed it out, the issue was postponed by the company, they alleged.
Edited by Manoj Sharma