“WHEN in in doubt, please disclose,” this is a famous adage of India’s software guru NR Narayana Murthy, who is one of the co-founders of Infosys, which is world renowned for its ethical governance.
But, in the post-founders era, Infosys has come to be known more as a company hit by complaints lodged by whistle-blowers. Vishal-Sikka-Murthy spat is still fresh in the minds of people and millions of small-time investors who lost their precious money as the stock plunged at the bourses.
Then, Murthy has been in the forefront to take on the heady board members led by the then chairman R Seshasayee, but has so far remained silent and not spoken a word about the fresh allegations against Infosys top executives.
The reason for it is not hard to find out – after all, it is very easy to go hammer and tongs against an outsider like Seshasayee, but needs a lot more moral courage to be raise a voice, when an insider is at the helm of affairs.
The fresh allegations have been leveled by a group of whistleblower, who claim to be an ethical group of employees within. They claim that, both company CEO Salil Parekh and CFO Nilanjan Roy, have fudged accounts sheet to project inflated revenues and profits.
They have also been accused of racists comments against some of the borad members, calling two of them Madrasis and lead-independent director Kiran Majumdar Shaw diva.
Both Parekh and Roy also have been accused of not taking approvals from the board in the accounts sheet.
Strangely, the stance adopted by company chairman Nandan Nilekani, not to disclose whistle-blowers’ letter to the Indian and US regulators immediately, is unacceptable as Infosys is known worldwide for its fair corporate governance.
It also does not behove of Nilekani to justify delay in intimating the regulators of the wrongdoings before Infosys completes its internal inquiry, because the company is piloting many projects of national importance like GST and e-filings of the Ministry of Corporate Affairs.
Also, Nilekani was anointed as the chairman to salvage the falling corporate governance ratings when the company was gripped with Murthy-Sikka spat, which was fought over inflated payments given to acquire an Israeli automation company, Panaya, and former CFO Rajiv Bansal, which the Infosys co-founder termed them as hush monies.
Equally unacceptable is Nilekani’s definition of material information, an information that can be only disclosed if in all likelihood influences or affects investors significantly, who could play long or short at the bourses, having a significant impact on the market price of the company’s stock.
A Rs-53,000 crore slide on market capitalization and the highest one-day sell off in the stock in over half a decade, is testimony enough that the allegations were material enough to be disclosed, keeping in view the slip the stock experienced during Sikka-Murthy tug-of-war.
Also, Nilekani should have been concerned with investors, who have been been battered with a spate of corporate governance issues at various companies of late.
A big bull can afford to lose Rs 178.29 crore due to the crash in Dewan Housing Finance Limited share price, which slid because of governance issues, but what about small-time and moderate investors?
Probably, Nilekani thinks, by justifying delay, he has allayed fears, but knows he hasn’t at the back of his mind, for sure a stock like Infosys has a cyclic price fluctuations. He, for sure knows, the scrip will bounce back after settling the lacunae. But, what if a daughter has to be married on time and the poor investor has lost?
Sensitivity has a value, and it appears that the only people who have executed Murthy’s “when in doubt, please disclose” adage are the so-called “ethical employees”, who in their wisdom had leaked the information to the press, that are departures from the company’s ethical governing norms.
Murthy may agree, cent per cent!