Troubles are mounting at Infosys. A recently surfaced whistleblowers’ letter accuses the Infosys CEO Salil Parekh and CFO Nilanjan Roy of engaging in unethical and illegal practices to hush up the accounts of the company from Auditors and even from certain Board of Directors. The four-page letter shows that some employees also complained to the United States (US) Office of the Whistleblowers Protection Program, which would create more trouble for the Infosys for unethical and illegal practices.
The insiders have already submitted email and voice communications with the CEO and CFO, directing staffers to hush-up the details of financial transactions from Auditors and certain Board of Directors. From the whistleblowers’ letter, it is certain that the Infosys top management tried to hush-up the visa costs, revenue from contracts with Verizon, Intel, Joint Ventures in Japan, and ABN Amro acquisition. The letter also shows that Infosys tried to keep its share prices high by fooling investors.
This explosive letter has put the CEO Salil Parekh in bad light about his attitude towards certain Board of Directors. He terms some Directors of Tamil origin as “Madrasis” and Independent Director Kiran Mazumdar Shaw as “Diva”.
“In the last quarter, we were asked to not to fully recognise costs like visa costs to improve profits. We have a voice recording of these conversations. When the auditor opposed, the issue was postponed. This quarter, there is a lot of pressure not to recognise reversals of $50 million (more than Rs.350 crores) of upfront payment in the FDR contract, which is against accounting practice. As this reduces the profits for the quarter and negative for stock price, they are putting pressure not to take the charge.
“Critical information is hidden from the auditors and the Board. In large contracts like Verizon, Intel and JVs in Japan, ABN Amro acquisition, revenue recognition matters are forced which are not as per accounting standards. We have emails and voice recordings and we will share when investigators ask us. We are asked not to share large deal information with auditors,” said the Infosys whistleblowers.
This explosive letter has put the CEO Salil Parekh in bad light about his attitude towards certain Board of Directors. He terms some Directors of Tamil origin as “Madrasis” and Independent Director Kiran Mazumdar Shaw as “Diva”.
“Large deal approvals have irregularities. The CEO is bypassing reviews and approvals and instructing sales not to send mails for approval. He directs them to make the wrong assumptions to show margins. The CFO is compliant and he prevents us from showing in board presentations large deal issues. The CEO told us “no one in the Board understands these things, they are happy as long as the share price is up. Those two Madrasis (Sundaram and Prahlad) and Diva (Kiran) make silly points, you just nod and ignore them”. We have voice recordings of this.
“Several billion dollars deals of the last few quarters have nil margin. Please ask auditors to check deal proposals, margins, undisclosed upfront commitments made and revenue recognition. All information is not shared with auditors,” said the Infosys whistleblowers.
The detailed letter and complaint given to US authorities by Infosys whistleblowers is published below:
Infosys Letter by PGurus on Scribd
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How does the letter prove anything? I can also type such a letter, take a printout and share it on social media . Will take 10 mins at the max. Authenticity will only get proven if the so called whistleblowers reveal their identities. Until then it is just a mischief.
I don’t understand,what is wrong with Infosys? Earstwhile stallar company, is getting embroiled into one unethical controversies to other.