Prosecute Infosys management, Board: whistleblower

Infosys is under pressure to restructure its board and revamp corporate governance policies, in the aftermath of a fresh letter from a whistleblower.

The letter claimed irregularities in the Panaya acquisition and severance pay to former CFO Rajiv Bansal and asked regulator SEBI to prosecute both the management as well as the Board. The letter also asked for a full forensic probe into all the allegations. “Why not SEBI order a fully independent investigation, including a forensic investigation, and make people accountable?,” the letter asked.

The letter added that if Infosys is allowed to settle the issue through the “back door”, then no whistleblower in future will take the pain to expose any malpractices in the corporate sector. The impunity with which the Board, both past and present, dismissed the allegations when they knew they were wrong is unprecedented and SEBI should dismiss the settlement overture and prosecute the management and the board to set an example, it added.

Consent plea

The letter comes in the backdrop of Infosys filing for a consent plea with SEBI to resolve allegations relating to the company not seeking prior and separate approval of the Nomination and Remuneration Committee as well as the Audit committee with regard to the severance agreement. The consent plea also absolves Infosys of any wrongdoing or admission of guilt, something which the whistleblower has objected to.

Of its Board to ensure stronger governance standards especially with the new CEO Salil Parekh set to take over,” said Shriram Subramanian, MD, InGovern. Infosys did not respond to comments on the whistleblower e- mail.

The development has put the spotlight on Board members such as Ravi Venkatesan and Roopa Kudva who the whistleblower has alleged did not perform their duties. After Vishal Sikka resigned, the then co-chairman, R Seshasayee, resigned along with some Board members.

V Balakrishnan, former Infosys CFO, who has been seeking the ouster of the Board members from the time the corporate governance lapses came into light, believes that view of the current developments, they have to go and those positions should be filled with people of high integrity and stature.

Industry watchers pointed out that the letter could also hint at the fact that not all the co-founders are on the same page and there is friction between them. “Nilekani was brought in by FIIs who were concerned about the impact that the battle was having on their investments and also to negotiate with Murthy,” said a Mumbai-based hedge fund CEO.

Others like Amit Jadhav, professor at TA Pai Management Institute, said Nilekani wanted to give this issue a quite burial and resolve matters, but the whistleblower letter is like two steps forward and one step back.

Some in the industry like Prasanna Kumar, Chairman, Bellfast Management, an HR Consultancy firm, pointed out that ‘settlement without admission’ is common and Infosys needs to move forward and tackle business-specific issues rather than get caught in such controversies.

Link: Business Line- 09 Dec 2017