Opinion | Infosys shock
Just when stability seemed to have returned to Infosys after years of tumult, the company has been hit by a fresh controversy. Some of its employees have anonymously accused its CEO Salil Parekh and CFO Nilanjan Roy of “unethical accounting practices”. On 20 September, they reportedly first wrote to the board, alleging suppression of cost information in recent quarters. On 3 October, someone complained to the office of the Whistleblower Protection Program in the US.
Infosys has said that the complaint has been sent to its audit committee. According to the complainants, employees were asked not to fully recognize costs such as those incurred on visas during the relevant quarter. The alleged purpose was to portray higher profits and keep Infosys’s stock price buoyant. They also contend that the management put pressure on them not to officially note reversals of contractual payments worth $50 million.
While it’s good that Infosys has begun examining the charges, its own best interest would lie in a speedy investigation by a credible team. Shareholders had expected that all would be well at the firm after the bruising battle over its leadership was resolved in 2017. For decades, Infosys was regarded as not just a bellwether in the infotech services space, but also as an upholder of professional ethics and high standards of corporate governance. Its archrival, after all, has been Tata Consultancy Services, a Tata Group firm. Widely admired companies usually have the most to lose by the slightest whiff of scandal. The sooner we get to the bottom of this, the better.