From bringing back a co-founder to appointing a new CEO, Infosys is doing everything it can to turn the tide, but its troubles just don’t seem to be ending.
On Dec. 09, the anonymous whistleblower who had earlier raised questions over corporate governance at Infosys, asked the Securities and Exchange Board of India (SEBI) to dismiss a settlement request proposed by the company.
“The impunity with which the board, both past and present, dismissed the allegations when they knew they were wrong is unprecedented and just for this reason, SEBI should dismiss this settlement overture and prosecute the management and board to set an example,” the whistleblower said in a letter sent to the media, a copy of which was reviewed by Quartz.
In February this year, the whistleblower had questioned the Rs17.4 crore ($2.7 million) severance package of former CFO Rajiv Bansal and the financial irregularities in Infosys’s $200 million acquisition of Israeli software firm Panaya. These queries have time and again been raised by others, including Infosys founder NR Narayana Murthy.
The whistleblower’s request to the stock market regulator is in reaction to an application from Infosys on Dec. 06 (pdf), in which it requested a settlement over the two issues raised. The company has sought to reach a settlement with SEBI on the undertaking that it will ”neither admit nor deny the finding of fact or conclusion of law.”
These concerns are being raised by the whistleblower even after two different groups of board members have investigated the allegation and concluded that there was no wrongdoing. Most recently, in October, after a second round of investigations under the leadership of co-founder Nandan Nilekani, Infosys had said (pdf): “There was no merit to the allegations of wrongdoing with respect to the acquisition of Panaya. The review also confirmed that the company made appropriate and timely disclosures relating to severance payments to the former CFO at the end of the quarter of his resignation.”
Nilekani said he’d personally reviewed the issues and was “fully persuaded” that there was no merit to the allegations.
Nonetheless, the whistleblower disagrees. “The truth is that the investigation was ordered, conducted and directed under the supervision of the same management and board which participated and precipitated such excesses,” the letter said. “The conclusions are known before the investigations were ordered. It is a real mockery of justice.”
Damage done
The whistleblower’s allegations have already caused a lot of disruption at Infosys.
With several co-founders constantly reiterating the whistleblower’s claims, the company’s then CEO Vishal Sikka abruptly quit in August this year. Several board members also resigned unexpectedly, and Nilekani was brought back to help the company stabilise.
On Dec. 02, Infosys appointed 53-year-old Salil S Parekh as its new CEO, effective Jan. 02. Parikh comes from French IT services company Capgemini. His appointment cheered investors with the company’s shares rising around 4% a day after the announcement about the new CEO was made. But the whistleblower is in no mood to relent: “If Infosys is allowed to settle the matter through the back door it will be the saddest day for the investors and end of any more whistleblowers taking the pain and risk in complaining.”