A group of Infosys whistleblowers has alleged that CEO Salil Parekh has been fudging the company’s financials and inflating profits in the recent quarters, along with allegations of passing racist and misogynistic comment about various members of the board.
In response to the complaint, the company said that it is investigating the issue. “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 a statement.
In the letter to the board of the Infosys, the employees of Infosys have alleged that they were told not to reports costs in recent quarters in a bid to inflate profits. “We have high respect for all of you and bring to your notice unethical practices of CEO in the recent quarters… In the last quarter, we were asked not to fully recognise the costs like visa costs,” the letter in possession of DH said.
The letter also alleges that during the current quarter, there is a pressure of not recognising $50 million of the costs incurred by the company. The employees of the company, who wrote the letter, also claim to have the audio recordings for the same.
The four-page letter also states that in case of large contracts like Verizon, Intel and ABN Amro acquisition, the revenue recognition is not as per accounting standards.
The letter also says that there have been irregularities in the large deal signings. “CEO is bypassing reviews and approvals and instructing sales not to send an email for approvals. He directs them to make wrong assumptions to show margins,” the letter said.
The company has seen a surge in large deal signings in the past few quarters, while the margins have been under stress. In the September quarter, the company has seen its large deal wins growing to $2.7 billion, despite the curb in the spent the global corporate.
The letter also alleges that the company’s CFO Nilanjan Roy has collaborated with Parekh in fudging the numbers.
The letter also quotes Parekh making personal remarks against two board members – DN Prahlad and D Sundaram and misogynist comments against Kiran Mazumdar-Shaw. The letter quotes Parekh telling the company’s management, “These two Madrasis (Sundaram and Prahalad) and Diva (Kiran) make silly points, you just nod and ignore them.” Madrassi was an ethnic slur used for people of South India by North Indians.
It has been less than two years since Parekh took over as the CEO of the company after its former CEO Vishal Sikka made an unceremonious exit. Sikka was involved in a prolonged battle with the founder-promoter group of the company over the governance issues.