Unconvinced with Infosys Chairman Nandan Nilekani’s comments about how “even God cannot change Infosys’ numbers”, the Securities and Exchange Board of India (SEBI) is investigating the info-tech giant.
When asked about the same on the side-lines of CII’s capital market summit, SEBI Chairman Ajay Tyagi said, “You have to ask him (Nilekani) or you can actually ask God and I’ve nothing to say on this issue.”
Moneycontrol was the first to report that SEBI may intervene in the matter.
On its part, a SEBI statement read: “Investors should draw their own conclusions. We are looking into the matter and we have shared some information with the Securities Exchange Commission (SEC). It is confidential between two regulators."
Addressing analysts in a conference call on November 5, Nilekani said he felt “insulted with the (whistleblowers’) accusations,” and that “even God can't change the earnings of the company.”
Whistleblowers' have made a series of allegations against Infosys CEO Salil Parekh and CFO Nilanjan Roy.
A group of Infosys staffers calling themselves ‘ethical employees’ wrote to the Infosys’ board and to the US Securities and Exchanges Commission (SEC) in September about the accounting irregularities.
The whistle-blowers in their letter claimed, "Critical information is hidden from the auditors and board. In large contracts like Verizon and Intel, joint ventures in Japan, and ABN Amro acquisition revenue recognition matters are forced, which is not as per the accounting standards.’’
The letter also mentions about the management putting immense pressure on them to not recognise reversals of Rs 353 crore of upfront payment in the FDR contract, as it would slash profits for the quarter and negatively affect the company's stock price. Not recognising reversals of upfront payment in FDR contract was against fair accounting practice, they stated.
In addition to writing to the company, the whistleblowers say they have presented evidence to the US Securities and Exchange Commission in the form of recordings and emails.
This is not the first time that Infosys is under the SEBI scanner. Earlier, the company's Panaya deal was also investigated by the financial market regulator.
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