Alleged corporate governance issues: Infosys not to make probe findings public

Infosys has said it does not plan to make public, the findings of its independent investigation concerning corporate governance issues.

In a statement, an Infosys spokesperson said that after a detailed and extensive investigation conducted by Gibson Dunn and Control Risks, they did not find any evidence of wrongdoing by the management, to support the allegations of an anonymous complaint. “The summary finding statement of this investigation is also available on our website,” the statement added.

Earlier, Infosys co-founder NR Narayana Murthy had asked the findings of an earlier investigation — by law firm Cyril Amarchand Mangaldas — relating to corporate governance lapses in the IT firm, to be made public, indicating his continued unhappiness over the way the company is run.

According to reports, Murthy has sought full details of the probe and want complete disclosure on the relationship between executives of Infosys and investors of Panaya (an Israeli firm acquired by Infosys), in the interest of transparency.

Infosys had previously asserted that it has made full disclosure on the subject.

The issue of Panaya first came up when an anonymous email was sent to SEBI and the US Securities and Exchange Commission alleging that the acquisition was overvalued and that there was a possibility of some Infosys executives benefiting from the deal.

Subsequently, Infosys hired Cyril Amarchand Mangaldas to look into questionable corporate governance practices, and into allegations that it had allowed Panaya investors to strip Infosys of its cash and give short-term loans to make Panaya viable. The letter had also alleged that Infosys had paid a 25 per cent margin to the valuation of a Series E investor, a fact which the India’s second largest software exporter refutes. Infosys has said it had given no loans to Panaya and that the valuation of investment in preferred stock vs 100 per cent strategic acquisition cannot be compared.

Murthy had also raised concerns over the ₹23-crore severance payment given to former CFO Rajiv Bansal. On June 23, a day before its AGM, Infosys board and top management were cleared of any wrongdoing, after an independent investigation.

The Infosys spokesperson added that the probe involved interviews of over 50 witnesses in India, the US and elsewhere; review of company policies, board minutes, public filings and internal documents; collection, search and review of thousands of internal emails and attachments; use of forensic accounting experts to analyse technical and financial information; review of public filings and media accounts in multiple countries; review of CAM (Capital Assets Management) reports and supporting documentation; and other investigative measures.

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