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    Infosys hires PwC to probe plaints

    Synopsis

    Infosys hired PwC to investigate two whistle-blower complaints alleging financial malfeasance against chief executive and finance chief. The company has already roped in law firm Shardul Amarchand Mangaldas (SAM) to look into the legal side of the complaints and asked its internal auditor, EY, to probe its revenue recognition practices.

    Agencies
    Audit firm to look into contracts signed with clients and the way it recognised revenue.
    MUMBAI: Infosys has hired PwC to investigate two whistle-blower complaints alleging financial malfeasance against chief executive Salil Parekh and finance chief Nilanjan Roy, three people with direct knowledge of the matter said.

    The Bengaluru-based technology company has already roped in law firm Shardul Amarchand Mangaldas (SAM) to look into the legal side of the complaints and asked its internal auditor, EY, to probe its revenue recognition practices. Its board on Saturday decided to carry out an investigation independent of the other two as it wanted a “fresh set of eyes” to look into the allegations, said the people.

    PwC’s investigation would cover the contracts that Infosys entered into with some of its clients and the way it recognised revenue, they said. It has been asked to submit the report within two months.

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    “Initially there was a view that most people including investors and clients would see that the issue and allegations do not hold water. But looking at the impact that this has had (on stock price and reputation), many board members were of the view that a separate investigation should also be carried out,” said one of the people.

    An Infosys spokesperson, responding to an email query, said, “We do not have any information or comment to share on the below (question) at this time.” PwC did not respond to ET’s query till press time Wednesday.

    “The investigations would focus on the allegations, but the firm (PwC) is mandated to even go beyond the allegations and a broader time period, and the company’s deals would be investigated,” said another person in the know. “The firm has been asked to submit the report as early as possible,” he said.

    “Process review of certain contracts with customers would be carried out … This is a separate line of investigation and we want that this forensic audit (by PwC) look into revenue recognition and actually investigate contracts,” said the third person.

    Infosys last month said an unnamed whistle blower, apparently a group of employees, had accused top executives of unethical practices. The company said its audit committee had been asked to look into the complaints and take necessary actions.

    The whistle-blower letter, written to the US Securities and Exchange Commission and the board of Infosys, alleged that fearing a negative impact on the share price, the CEO instigated some employees to bypass approvals in order to fetch some large deals.
    (Catch all the Business News, Breaking News Events and Latest News Updates on The Economic Times.)

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    9 Comments on this Story

    Saurabh Khanna318 days ago
    PWC??? Are you serious guys ?? That too for an independent investigation??
    Seems ita been 100 years satyam scam
    Ppl memory fades very easily
    Imran Ahmed318 days ago
    PwC is the best auditing company which can cover up all irregularities which itself is an Indication that Infosys wants to cover up something.
    ST318 days ago
    That is the difference between Infosys and RIL.
    As a former senior employee of RIL, I had reported Financial CSR irregularities/Fraud with rampant neglect of much needed healthcare facility the Dhirubhai Ambani Hospital at Lodhivali/ Patalganga. The corrupt and complicit internal Ethics Compliance Task Force under the patronage of L V Merchant of RIL shielded Dr. S M Shanbhag the mastermind and other officials. As Whistleblower I faced victimization hounding and retaliation. Unlike in case of Infosys thanks to the clout of RIL, SEBI insiders scuttled probe. Unlike Infosys independent directors or Audit committee of RIL or external agency did not probe the facts or gave me audience. As insider I am hundred percent aware of Modus operandi of permissive poor financial control and deficit funding via Reliance Foundation at DAH Lodhivali/Patalganga. KPMG India while auditing DAH then had red flagged receivables amongst other. The MCA CSR and RoC RD-West are yet to give hearing to Whistleblower. After DNA report of 19 June 2019 on RIL probe I believe new rules/law of CSR was passed. As Whistleblower I have again this morning requested Hon. Nirmala ji Sitharaman to give personal hearing and probe RIL''s financial CSR fraud, Corporate Governance Failure at RIL and Whistleblower victimization and SEBI MCA insiders in the interest of Swachh Bharat. Even Today, I repeat Today People Living with HIV AIDS (PLHAs) are under neglect due to run down Dhirubhai Ambani Hospital Lodhivali.
    The Economic Times