Infosys Whistleblower....

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Whistleblower accuses Infosys of ‘unethical’ practices to boost numbers

Bengaluru: An anonymous group calling itself “ethical employees” has complained to the board of InfosysNSE -2.34 % and the US Securities and Exchange Commission (SEC) alleging that the company is taking ‘unethical’ steps to boost short-term revenue and profits and stating that the complainants have emails and voice recordings to substantiate the claims. Copies of the letters sent by the group to both the board of Infosys and the SEC were shared with ET. In the letters, the group alleges that CEO Salil Parekh is bypassing reviews and approvals for large deals. “He (Parekh) directs them to make wrong assumptions to show margins. CFO is compliant and he prevents us from showing in board presentations large deal issues…Several billion-dollar deals of last few quarters have nil margin,” the letter states. “Please ask auditors to check deal proposals, margins, undisclosed upfront commitments made & revenue recognition,” the letter stated. Infosys is examining the charges made by the whistleblower, the company said late on Sunday night. “The whistleblower complaint has been placed before the Audit Committee as per the company’s practice and will be dealt with in accordance with the company’s whistleblowers’ policy,” it said in a statement. The letter added that the complainants were asked to not fully recognise visa costs in the quarter and were pressured to not immediately recognise $50 million in reversals in a contract. “In large contracts like Verizon, Intel, JVs in Japan, ABN AMRO acquisition, revenue recognition matters are forced, which are not as per accounting standards,” the letter stated.

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US SEC investigates India's Infosys on whistleblower complaints

 

Infosys Ltd on Thursday said the U.S. Securities and Exchange Commission (SEC) has launched a probe into whistleblower claims that the Indian software services firm used 'unethical practices' to boost revenue and profit.

The company said India's market regulator, the Securities and Exchange Board of India, has also asked it to submit information concerning the complaints.

Infosys, India's second-biggest IT services firm by revenue after Tata Consultancy Services Ltd, on Tuesday said it was investigating claims including that Chief Executive Officer Salil Parekh bypassed reviews and approvals for large deals fearing the negative impact of reduced profit on Infosys' share price.

It also disclosed claims that Chief Financial Officer Nilanjan Roy prevented employees from highlighting issues around large deals in presentations to the board.

Parekh and Roy declined to comment when contacted through Infosys.