Infosys Says Looking Into “Unethical Practices” Alleged In Letter: Report
The RSS called Infosys "anti-national" for letting down the tax system, sending a chill through the industry wary of falling on the wrong side of the PM Modi government
A few unnamed employees of software giant Infosys have accused its chief executive officer (CEO) Salil Parekh and chief financial officer (CFO) Nilanjan Roy of unethical practices for many quarters.
“Parekh and Roy have been resorting to unethical practices for many quarters, as evident from their e-mails and voice recordings of their conversations,” said the complainants, who called themselves “ethical employees” in a two-page letter to the Bengaluru-based information technology firm’s board of directors on September 20, a copy of which has been accessed by IANS.
When there was no response from the board to their letter, an unnamed whistleblower on behalf of the employees on October 3 wrote to the US-based office of the Whistleblower Protection Programme, alleging wilful misstatement and accounting irregularities for the last two quarters (April-September).
In response, Infosys in a statement on Monday said the complaint has been placed before the audit committee as per the company’s practices. “The complaint will be dealt with in accordance with the company’s whistleblowers policy,” Infosys said in a statement to IANS.
“In (the) last quarter (July-September), we were asked not to fully recognise costs like visa costs to improve profits. We have voice recordings of these conversations,” the employees claimed in the letter.
The employees alleged that in the quarter under review of fiscal 2020, the management put immense pressure on them to not recognise reversals of $50 million upfront payment in FDR (fixed depository receipts) contract, as it will slash profits for the quarter and negatively affect the company’s stock price. The letter said not recognising reversals of upfront payment in FDR contract was against fair accounting practice.
“Critical information is hidden from the auditors and board. In large contracts like Verizon, Intel and JVs (Joint Ventures) in Japan, ABN Amro acquisition, revenue recognition matters are forced which is not as per the accounting standards,” the letter alleged.
The employees said they have been instructed not to share large deal information with auditors. They said they are confident of sharing the alleged emails and voice recordings with investigators when demanded.
“The CEO is bypassing reviews and approvals and instructing sales (teams) not to send mails for approvals. He directs them to make wrong assumptions to show margins,” the letter alleged.
Alleging that the CFO was hand in glove with the CEO, the complaint claimed the former complied with unethical practices, restraining ethical employees from showing large deal issues to the board during presentations.
