Law firm Shardul Amarchand Mangaldas & Co. to investigate ‘unethical practices’ of Salil Parekh, CFO Nilanjan Roy

Infosys has started an independent probe into alleged unethical practices by its CEO Salil Parekh and CFO Nilanjan Roy.

The action follows complaints from whistle-blowers about unethical practices.

On Monday, the Infosys board’s audit committee retained law firm Shardul Amarchand Mangaldas & Co. to conduct an independent investigation. “The board, in consultation with the audit committee, will take such steps as may be appropriate based on the outcome of the investigation.

“Our statutory auditors, Deloitte India, have also been completely updated on this matter post the board meeting of October 11, 2019.

Read: Here is the text of the whistleblower's letter to the Infosys Board and to the US SEC

“Because the investigation is ongoing, there will be no further comment so that investigation may be conducted in a thorough and objective manner. At the appropriate time, we will provide a summary of the investigations results,” said Nandan Nilekani, chairman, Infosys, in a statement.

CEO, CFO recused

Mr. Nilekani said to ensure independence in the investigations, the CEO and CFO have been recused from this matter.

It all started with a group, calling itself ‘ethical employees’, filing a whistle-blower statement with the Infosys board and the U.S. Securities and Exchange Commission, alleging that the company’s top executives were bending rules with regard to accounting of revenue from large deals to make them look more profitable.

Also Read Infosys audit panel to conduct independent probe on whistleblower allegations: Nilekani

One of Infosys’s board members received two anonymous complaints on September 30, 2019 — one dated September 20 titled ‘Disturbing unethical practices’ and the second undated with the title ‘Whistleblower complaint’, said Infosys in a statement.

Complaints with panel

As per the company’s whistle-blower policy, both the complaints were placed before the audit committee on October 10, 2019 and before the non-executive members of the board on October 11, 2019.

Additionally, on October 16, 2019 the company was made aware of a letter dated October 3, 2019 which was purportedly written to the Office of Whistleblower Protection Program, Washington D.C.

This letter refers to the September 20, 2019 complaint and emails and voice recordings in support of the allegations.

“The undated whistle-blower complaint largely deals with allegations relating to the CEO’s international travels to the U.S. and Mumbai.

“Although, we have not been provided any of the emails or voice recordings, we will ensure that the generalised allegations are investigated to the fullest extent,” said Mr. Nilekani.

Post the board meeting of October 11, 2019 the audit committee began consultations with independent internal auditors (Ernst & Young) on terms of reference for their prima facie investigation.

On Monday, the audit committee retained law firm Shardul Amarchand Mangaldas & Co. to conduct an independent investigation.

“The board, in consultation with the audit committee, will take such steps as may be appropriate based on the outcome of the investigation. Our statutory auditors, Deloitte India have also been completely updated on this matter post the board meeting of October 11, 2019. Because the investigation is ongoing, there will be no further comment so that investigation may be conducted in a thorough and objective manner. At the appropriate time, we will provide a summary of the investigations results,” said Mr. Nelikani.

Also Read Infosys shares drop nearly 16% on whistleblower plaint

Infosys shares tanked 16.21% to close at ₹643.30 in a weak Mumbai market on Tuesday.