Infy Dy CFO's exit conveys something is 'rotten': R-Sec

The recent exit of deputy chief financial officer Jayesh Sanghrajka from Infosys reveals that something is 'rotten' within the company, according to brokerage firm Reliance Securities.

The statement from the brokerage firm comes after allegations of financial fudging and racism by the company's CEO & MD Salil Parekh. The allegations were made by an anonymous whistleblower group in a letter, which was leaked to DH. The company has long been seen as the poster boy of India Inc's corporate governance norms.

"Very serious news indeed. This equates to a corporate governance issue. Deputy CFO has also quit. This in itself is an indirect admission that something is rotten," Harit Shah, Research Analyst, Reliance Securities said.

Sanghrajka, who had been made interim CFO following the resignation of then CFO MD Ranganathan in November last year, resigned from the company last week. He has spent 14 years in Infosys spread over two stints.

The brokerage firm expects the company's stocks to languish 10-15% lower in the near term.

"It calls into severe question board-level processes at the IT major, which is even more disappointing given that when co-founder Nandan Nilekani was brought back on the board, his specific focus was to ensure high corporate governance standards post the Vishal Sikka fiasco," the brokerage said.

Meanwhile, the corporate governance experts say that the allegations are of a serious nature and investors need to know the real truth.

"The Audit Committee and the Board need to accord the highest importance to the issue and investigate on an urgent basis. Shareholders need to be given the true picture. As of now, It is not clear whether the Dy CFO's exit is linked to these allegations," said Shriram Subramanian, founder of InGovern Research Sevices.