Infosys whistleblower mail calls into question board processes: Reliance Securities
The letter alleged that the company was taking ‘unethical’ steps to boost short-term revenue. The letter further alleges that CEO Salil Parekh was bypassing reviews and approvals for large deals, which in some cases have ‘nil margins.’
On Monday, ET reported that a group calling themselves ‘ethical employees’ had filed a whistleblower statement with the company’s board and the US Securities and Exchange Commission.
The brokerage pointed out that the company’s deputy chief financial officer Jayesh Sanghrajka had resigned earlier this month.
“This in itself is an indirect admission that something is rotten….Really disappointing that a company that has long been viewed as a "poster boy" of corporate governance in India has seemingly fallen to such levels,” analyst Harit Shah said.
The letter alleged that the company was taking ‘unethical’ steps to boost short-term revenue and profits and states the complainants have emails and voice recordings to substantiate their claims. The letter further alleges that CEO Salil Parekh was bypassing reviews and approvals for large deals, which in some cases have ‘nil margins.’
“It calls into severe question board-level processes at the IT major, which is even more disappointing given that when founder Nandan Nilekani was brought back on the board, his specific focus was to ensure high corporate governance standards post the Vishal Sikka fiasco,” analyst Shah said.
He added that the recent issue appears quite ugly at least on the surface.