Infosys Ltd.'s Chairman Nandan Nilekani assured investors of an “objective” investigation after an anonymous whistleblower letter alleged Chief Executive Officer Salil Parekh of accounting irregularities and dressing up the company's books.
The audit committee has retained the law firm of Shardul Amarchand Mangaldas & Co. to conduct an independent investigation into the allegations, Nilekani said in a statement, uploaded by India's second largest software services provider on the bourses on Tuesday. The company's board, in consultation with the audit committee, will take such steps as may be appropriate based on the outcome of the investigation, it said. “Our statutory auditors, Deloitte India, have also been completely updated on this matter post the board meeting of Oct. 11.”
Nilekani, according to the statement, said one board member received two anonymous complaints on Sept. 30 and Sept. 20 titled “disturbing unethical practices”. “The undated whistleblower complaint largely deals with allegations relating to the CEO's international travel to the U.S. and Mumbai,” he said.
On Oct. 16, the company was made aware of a letter received on Oct. 3 which was written to the Office of Whistleblower Protection Programme in Washington D.C, referring to the Sept. 20 complaints, emails and voice recordings in support of the allegations, the statement said. While Infosys does not have the emails or the voice recordings, it will investigate the allegations to the “fullest extent”, it said.
A letter from a group of “Ethical Employees” accused Parekh of unethical practices in “recent quarters” to boost short-term revenue and profits, according to a copy published by Deccan Herald newspaper on its website. Employees were asked not to fully recognise costs like those for visas of employees to improve profits, according to the letter dated Sept. 20 addressed to the company's board and the U.S. Securities and Exchange Commission.
The allegations come two years after Vishal Sikka quit as CEO following a founder-led boardroom coup. He, too, faced whistleblower allegations and corporate governance concerns stemming from his salary and acquisitions and how much Infosys paid for them.
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