The Infosys logo is seen at the SIBOS banking and financial conference in Toronto, Ontario, Canada October 19, 2017. Reuters/Chris Helgren
An anonymous whistleblower complaint alleging that Infosys Ltd. Chief Executive Officer Salil Parekh made the finance team use irregular accounting practices to shore up profits has stirred up things again at the once-beleaguered firm.
The letter addressed to the Infosys board and published by the Deccan Herald newspaper charged Parekh of "unethical practices” in recent quarters to boost "short term revenues and profits,” the whistleblowers wrote in a note titled "Disturbing unethical practices.” The note signed "Ethical Employees” asked the board to investigate and take immediate action. They can provide email copies and voice recordings to support their charges.
"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,” Infosys said in an emailed statement. Infosys’s shares listed on the New York Stock Exchange were down 12% in early trading following the company’s statement.
The complaint dated Sept. 20 is the latest in a series of whistleblower complaints that wrought havoc at Asia’s second-most valuable IT services firm leading to the exit of its previous CEO Vishal Sikka after a confrontation with co-founder Narayana Murthy. The new complaint does not augur well for the company, which appeared to be recovering from Sikka’s departure by raising growth projections to 9% to 10% for this financial year versus 8.5% to 10% previously. Chairman and co-founder Nandan Nilekani proclaimed last year that Infosys had become "boring again.”
Infosys and its peers like Tata Consultancy Services Ltd. build software and provide services to some of the world’s largest banks and retailers. They have recently faced a turbulent business environment as they contend with a trend toward automation and clients’ changing needs to keep up with rapid technology changes.
Parekh, nearing the two-year mark in the CEO’s chair, has promised to re-skill employees and drive growth in digital services such as artificial intelligence and data analytics.
