With the Infosys audit committee giving a clean chit to its top executives on January 10, Chairman Nandan Nilekani at a post-results press conference raised doubts over whether these whistleblowers were actually even employees of the company.
Nilekani said: “How do you know that the ostensible ethical employees are Infosys employees or not?. That needs to be checked.”
“We believe that our employees, especially in the finance department have the highest ethical standards. We don’t think they have anything to do with this,” he said.
Though he did not definitely state there was an involvement of outsiders, Nilekani hinted there is a need to investigate if it was actually employees or outsiders claiming to be employees.
The company, however, has not made any attempt to identify the whistleblowers and has no intention of doing so in future. “You don’t go looking for whistleblowers,” Nilekani noted.
“The whistleblower policy, especially for US-listed companies, gives a lot of protection to whistleblowers because of worries that companies will do something to the whistleblower. Therefore, there is a lot of protection the policy provides, which we respect,” he said, adding, this also opens up the possibility of a weaponisation of the whistleblower policy.
As for the investigation, it is over as far as the company is concerned, Nilekani said. “I am happy about the investigation that gave a clean chit to the company and the leadership,” he added.
India’s second-largest tech major released the detailed report on the outcome of its audit committee investigation on a whistleblower complaint. The investigation was done with the assistance of independent legal counsel Shardul Amarchand Mangaldas & Co and PricewaterhouseCoopers.
The whistleblower complaint that was first published in the Economic Times pointed fingers at Infosys CEO Salil Parekh and CFO Nilanjan Roy for accounting irregularities to boost growth numbers. Following the report, Infosys share price tanked close to 16 percent on the BSE and the US stock exchange NYSE, wiping out its market cap by nearly Rs 50,000 crore.
Nilekani said the company will continue to engage with the authorities and regulators investigating the case, including SEC and SEBI.
The move has allayed the concerns of investors worried about the firm’s corporate governance and its performance. However, pending investigation from the US Securities and Exchanges Commission (SEC) and Indian market regulator Securities and Exchanges Board of India (SEBI) will be as important to cement its credibility, say experts.
The US SEC refused to comment on the progress of the investigation.
Shriram Subramaniam, founder, Ingovern Research Services, said, “The conclusion of these investigations will calm the investors. However, investors will also wait for the conclusion of the investigation by SEC and SEBI, where whistleblowers claim to have submitted evidence.”
Some investors though seem relieved. Vinay CS, an investor and chartered accountant by profession said: "It is good to hear and reasonably clear now.” Although he said, he will also want to keep an eye out on the outcome of the pending investigations.
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