Infosys CEO accused of unethical practices

Infosys, India's second largest IT services corporation has been accused of indulging in “unethical practices" to boom its short-term revenue and profits. 

An anonymous group which calls itself as “ethical employees” of Infosys has complained to the board of Infosys and to the US Securities and Exchange Commission (SEC) alleging that the company is taking ‘unethical’ steps to increase its short-term revenue and profits.

 It also claimed that it had recordings and mails which indicates that Infosys was indulging in such practices.

 It alleged that Mr. Parekh and chief financial officer Nilanjan Roy were pressuring the finance team to show more profit in their treasury management by taking risks and by making some changes to the policies.

The e-mail to the board and the US Securities and Exchange Commission (SEC) is dated September 20, 2019, while another e-mail is dated October 3, 2019, had also been sent to the U.S. Labour Department’s Office of the Whistleblower Protection Program including “documentary evidence’’ and voice recordings on several allegations which was made in the earlier e-mail.

In the letter, the group alleges that CEO Salil Parekh is bypassing reviews and approvals for large deals. He (Parekh) also directs them to create wrong assumptions to indicate margins.

The group also alleges that several billion-dollar deals of last few quarters have nil margin and asked the company to get deal proposals, margins, undisclosed up-front commitments and revenue recognition checked by the auditors.

In response Infosys said:

“The whistleblower complaint has been placed before the Audit Committee as per the Company’s practice and will be dealt with in accordance with its whistleblowers policy.”

The Securities and Exchange Board of India (SEBI) had even set up a probe committee to check out whether the allegations were true or not.

In past few years, government has received various complaints regarding unethical practices by various companies. Infosys is also doing the same and is trying to boost their profit via unfair means. Infosys should not be indulged in such types of practices otherwise there will be serious consequences and it can also result in significant fines and financial loss for the company.