Nilekani assures action if whistleblower allegations proved; Infosys up 4%
Infosys Ltd advanced 3.7 per cent to Rs 721.50 apiece in the intra-day trade on the BSE on Wednesday after the non-executive chairman Nandan Nilekani, during the company's concall, told investors that the company would take action if the allegations against it are substantiated.
"While I will not comment on the merits of the allegation at this time, the company will take action if the allegations are substantiated," Nilekani told investors.
He added: "The company became aware of complaint on September 30, which was placed before audit committee. On October 18, i.e. two days before the complaint was leaked, Chair of the audit committee decided to hire outside party to investigate complaints".
"Audit committee serves as custodian of whistle blower process... It's necessary to conduct investigation & take action in accordance with the law," he said.
In October, an anonymous whistleblower group called 'Ethical Employees' alleged that the company’s current management was taking 'unethical' steps to spur short-term revenue and profits.
According to the whistleblower's complaint to US Securities and Exchange Commission and the board of Infosys, the Bengaluru-based firm's current CEO Salil Parekh was not taking necessary approvals before entering into large deals. "Several billion-dollar deals of last few quarters have nil margin," the letter said. "In large contracts like Verizon, Intel, joint ventures (JVs) in Japan, ABN AMRO acquisition, revenue recognition matters are forced," the letter added.
Backing Parekh, the chairman of the IT bellwether said that he would give full credit to the CEO for the company's growth. "Speculations are aimed at tarnishing the image of some of the most accomplished and respected individuals," he said in a statement.
"Our role is to bring this investigation to an appropriate conclusion in the best possible time... The company will provide summary of investigation once it is complete," he said.
Earlier in the day, Infosys issued a statement saying the company "strongly condemns the mischievous insinuations made by anonymous sources against the co-founders and former colleagues, suggesting their involvement in the recent whistleblower allegations".
At 11:56 am, the shares were 3 per cent off lows, and trading 2.7 per cent higher at Rs 714.6 per share. In comparison, the S&P BSE Sensex was up 0.17 per cent. About 1.3 crore shares changed hands on the NSE and BSE till the time of writng of this report.