Bengaluru, NFAPost: IN a “pre-emptive” move, Infosys Chairman Nandan Nilekani today said even God cannot change the earnings of the company amidst an ongoing investigation into the alleged unethical financial practices by CEO Salil Parekh and CFO Nilanjan Roy.
He made these comments in response to analysts in a conference call. Nilekani said he felt insulted with the accusations, but the company has taken necessary steps to investigate the complaints.
“We at Infosys take whistleblower complaints very seriously. The audit committee, while serving as a custodian, has brought on an external team to investigate the plaint,” he said.
Responding to a query, Nilekani also said large margin deals is entirely decided by the management and it is fully within its right to take those calls.
The company will provide summary of ongoing investigation after it is complete, he said. Infosys has responded responsibly and complied with applicable laws and past practices, besides everything is being done to ensure business does not suffer, he said.
Responding to another query, Nilekani said he is unable to give a timeline on when the investigation will close. He said the company will take necessary steps if investigation substantiates the whistleblower complaint.
Infosys is committed to defining and following highest corporate governance standards, he said. He said the company will respond to class action lawsuit in due course.
Nilekani said Infosys on average has grown 11.4 per cent over the last four quarters with Salil Parekh leading the firm.
The whistleblowers had levelled serious allegations against Parekh and CFO Nilanjan Roy of indulging in unethical practices in inflating short-term revenues and profits of the company.
The whistleblowers also had shot off emails to Infosys co-founder NR Narayana Murthy and former CFO TV Mohandas Pai. They also claimed that they have submitted evidence to the US Securities and Exchange Commission in the form of recordings and emails.
Apart from complaining about financial reporting standards, whistleblowers alleged the top executives kept information from the board and violated the norms of reviews and approvals for large deals, many with allegedly nil margins.
Prima facie evidence
They also complained about Parekh asking the whistleblowers to ignore the “madrasis” on the board, who make silly points.
On November 4, Infosys had told National Stock Exchange that it has no prima facie evidence to corroborate any of the allegations.
The company also clarified that it is not in a position to determine the concreteness, credibility and materiality of the anonymous complaints, but they are still under investigation.
The whistleblowers’ complaint was reported to the outside world 21 days after it was made, which is not a violation of laws in any sense, but not in accordance with Murthy’s “when in doubt, disclose” mantra.