Infosys, one of India’s top software services firms, said it is investigating whistleblower claims that the firm’s top two executives had engaged in “unethical practices” to boost short-term profit.
The company said it will look into allegations that CEO Salil Parikh and CFO Nilanjan Roy engaged in forced revenue recognition from large contracts and did not adhere to accounting standards.
The allegations were part of a letter dated Sept. 20 sent by a group of whistleblowers, Reuters reports.
The letter, signed by “Ethical Employees” who claim to be part of Infosys, alleged irregularities with large deal approvals and said Roy directed certain people to make wrong assumptions on deals to show margins.
“Several billion dollar deals of last few quarters have nil margin,” the letter said.
Chairman Nandan Nilekani said in a statement on Tuesday that Infosys has placed the complaints before the audit committee on Oct. 10, and before the non-executive members of the board on Oct. 11.
The complaints are being dealt with in an objective manner, and Parekh and Roy are not part of the investigations to ensure independence, Nilekani said.
The audit committee has retained a law firm to conduct an independent probe, and the company’s board will take appropriate steps based on the outcome of the investigation, Infosys said.
The allegations come just two years after Infosys endured a shake-up that saw its then top boss Vishal Sikka leave the company, Reuters noted.
Following the latest news, Infosys shares tumbled as much as 16 percent on Tuesday, wiping out 470 billion rupees (US$6.63 billion) in the firm’s market capitalization.
– Contact us at [email protected]