Independent investigation clears Infosys CEO

The audit committee of Infosys, the second largest IT services company, has given clean chit to its chief executive officer Vishal Sikka and other directors after its investigation revealed that there was no financial impropriety as complained by a whistleblower.


The two anonymous letters sent by whistleblower in February this year made serious allegations against the Infosys management which talked about improper payment in the acquisition of two companies – Panaya, Skava and also the excessive expenditure incurred by CEO Vishal Sikka. Both the letters were forwarded to the market regulator Sebi.

Gibson Dunn & Crutcher, an US based law firm and Control Risks, a consulting firm conducted the investigation. The company also appointed the Indian law firm Khaitan & Company to provide legal counsel on Indian law matters. 


“We found no evidence whatsoever to support any of the new allegations in the complaints regarding wrongdoing by the company or its directors and employees, and those allegations were rebutted by substantial and credible evidence,” Gibson said in a statement.


Besides interviews of over 50 witnesses in India, the US, and elsewhere, investigation involved the review of company policies, board minutes, public filings and internal documents. It also reviewed many thousands of internal emails and attachments, among others.


The anonymous letters had alleged that Infosys had paid excess money for the acquisition of Panaya and Skava in 2015 in return for certain kickbacks with fingers pointing against the top management. Panaya was acquired for $200 million while it paid $120 million for Skava.


“As described in detail during our discussion with the Audit Committee, we found no evidence whatsoever to support any of the new allegations in the complaints regarding wrongdoing by the company or its directors and employees, and those allegations were rebutted by substantial and credible evidence,” the company said.


The company stated that there is no evidence that the CEO received excessive variable compensation or incurred unreasonable expenses for security, travel and the Palo Alto office. “We also concluded that Cyril Amarchand Mangaldas (CAM) in 2015 and 2016 previous investigations were thorough and that their findings and conclusions were reasonable and credible based on the evidence,” the company said.


The investigating firms also reviewed the two previous investigations completed by Indian law firm CAM in 2015 and 2016 on the allegations relating to the departure of the former CFO. The audit committee reports have come a day before the company plans to hold its annual general body meeting on Saturday in Bengaluru.

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