Infy probe report soon, new info on Coffee Day’s Siddhartha likely
The law firm, Shardul Amarchand Mangaldas which had been hired to investigate a complaint by a whistleblower group against Infosys CEO and CFO is expected to submit its report to the board today.
Sources close to Infosys said an announcement regarding the findings of the probe panel’s report is likely to be made during the press conference being held to declare the third quarter results of the company. The US SEC and the Indian regulator, SEBI are yet to come out with their findings so far.
Infosys stocks which were depressed for the last few days ended the day on Thursday slightly higher at Rs 727.60, up 1.71 per cent from the previous day’s closing price.
The probe committee constituted by the Infosys board, however, has to deal with a handicap as the whistleblower group had chosen to submit the emails and the voice recordings to substantiate its claims to the US Labour Department’s Office of the whistleblower Program as it believed that its identity will be compromised if the “evidence,” is sent to the Infosys board. It is not known whether the "evidence," has now been sent to the board.
Sources said three scenarios could play out depending on the outcome of the probe committee report. One, if the panel report finds that the whistleblower group’s allegations are true to a large extent, then the CEO, Salil Parekh who has just completed two years in office, will be forced to put in his paper along with the CFO, Nilanjan Roy.
The second possibility which looks likely could be that the probe panel may not find any “unethical” practices indulged by the duo. On November 4, last year, Infosys had told the BSE that there is no prima-facie evidence to corroborate the allegations. The non-executive chairman of the company, Nandan Nilekani has also put his weight behind the management declaring quite famously that “Infosys has very strong processes and even God can't change the numbers," at a recent analyst meeting. He also informed the analysts that a summary of the probe panel report will be shared with the shareholders.
The third scenario which could also play out will be about what Infosys management may want to do in case the probe panel extends its brief by suggesting to the board about the steps that need to be taken to ensure that internal norms are tightened.
In October last year reports about an anonymous employee group which called itself,” ethical employees group,” surfaced in the media. The group claimed that the CEO and the CFO were indulging in “unethical” practices to generate more profits and revenues. It also accused them of bypassing reviews and approvals to get bigger deals and not fully disclosing the contours of the deals to the board. The group in a letter dated September 20, 2019, to the board and the US SEC claimed that it had voice recordings and emails to prove their case.
Infosys in one of its official statements regarding the claims made by the whistleblower group had also said that recordings and the emails had not been sent to them. Hence, it remains to be seen how probe panels will base their findings without having access to these emails and recordings.