indica News Bureau-
A few unnamed employees of global software vendor Infosys have accused the company’s chief executive officer (CEO) Salil Parekh and chief financial officer (CFO) Nilanjan Roy of unethical practices.
“Parekh and Roy have been resorting to unethical practices for many quarters, as is 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 Bangalore-based IT behemoth’s board of directors Sept 20. A copy of the letter was shared with the news agency IANS.
When there was no response from the board, one unnamed whistleblower on behalf of the group wrote to the US-based office of the Whistleblower Protection Program Oct 3, alleging willful misstatement and material accounting irregularities for the past two quarters (April-Sept).
In response, the company in a statement Monday said the complaint had been placed before the audit committee of the board as per its regulations. “The complaint will be dealt with in accordance with the company’s whistleblowers policy,” the IT major said in a statement to IANS.
“In [the] last quarter [July-Sept], we were asked not to fully recognize costs like visa costs to improve profits. We have voice recordings of these conversations,” claimed the letter.
The employees also alleged that in the quarter under review of fiscal 2019-20, the management pressed them not to recognize reversals of $50 million of upfront payment in FDR contracts as it would slash profits and hurt the stock price.
The letter said not recognizing reversals of upfront payment in FDR contracts was against fair accounting practice.
“Critical information is hidden from the auditors and board,” said the letter. “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 accounting standards.”
The employees said they had been instructed not to share large deal information with auditors. The plaintiffs are confident of sharing the emails and voice recordings with investigators when asked for.
“The CEO is bypassing reviews and approvals and instructing sales [teams] not to send mails for approvals,” the unnamed Infosys employees said. “He directs them to make wrong assumptions to show margins.”
Accusing CFO Roy of being hand-in-glove with CEO Parekh, the insiders said he complied with unethical practices, restraining ethical employees from showing large deal issues to the board during presentations.
“The CEO told us no one on the board understands these things, they are happy as long as the share price is up,” said the statement. “Those two Madrasis [Sundaram and Prahlad] and the diva [Kiran Mazumdar-Shaw] make silly points, you just nod and ignore them.”
Biocon chairperson Mazumdar-Shaw is an independent director on the Infosys board.