Bengaluru: A new board is in place. A new CEO has been chosen. And a new year is just around the corner. But for $10 billion tech major Infosys, its old troubles are still not over.
A whistleblower in an email on Saturday asked the market watchdog, SEBI (Securities Exchange Board of India) not to allow Infosys a backdoor settlement alleging the company is guilty of fictitious payment to its ex CFO Rajiv Bansal and of a suspicious acquisition with personal conflicts attributed to senior management.
The email, also sent to select media, said the stock market regulators should prosecute the board and management of Infosys and not allow the company to settle the matter without accepting guilt.
“If this case is settled through the backdoor then no whistle-blower in future will take the pain to expose such things. Such a settlement, the one sought by Infosys, would be a sad day for investors,’’ reads the email. “Recently I read the news of Infosys Limited applying for a consent agreement with you (SEBI) to settle issues related to payment of obscene severance payment to its ex-CFO Rajiv Bansal. It was also told that such settlement is without admitting any guilt, the whistleblower said in his/her email to SEBI. Earlier this year, an anonymous whistleblower had sent another email alleging lapses in the company’s $200m Panaya acquisition and had also said Bansals’ severance package had been negotiated by then CEO Vishal Sikka without the consent from the board.” The email also states “While I understand it is a norm for large corporates to do backdoor settlements and protect their turf in case of genuine excesses, in Infosys case the regulator should deny that luxury and make the management accountable in the larger interest.”
“This is the first time an internal whistleblower has taken the pains to unravel a fictitious payment to an ex-CFO and a suspicious acquisition with personal conflicts attributed to senior management,” the whistleblower said.
Infosys board, at least on paper, had stalwarts who had rich corporate experiences ---Seshasayee, Ravi Venkatesan, and Kiran Majumdar Shaw, to name the few. It is important for the regulator to understand how the board (both current and the old) tried to cover up the issues. Seshasayee repeatedly said the board had done nothing wrong. He dismissed lack of approval from the board and minutes recording to simple “book keeping issues”.
They had multiple law firms doing investigation but gave clean chit to the board and management. The truth is that the investigation was ordered, conducted and directed under the supervision of the same management and board which participated and precipitated such excesses, said whistleblower.
“The conclusions are known before the investigations were ordered. It is a real mockery of justice. The impunity with which the board both past and present dismissed the allegations when they knew they were wrong is unprecedented and just for this reason SEBI should dismiss this settlement overture and prosecute the management and board to set an example,” said the email.
“Why does the SEBI not order a fully independent investigation including a forensic investigation into it and make people accountable? I think if SEBI really wanted to clean up the corporate world in India I think Infosys episode will be the test case. SEBI can set a great example in this case. If Infosys is allowed to settle the matter through the back door it will be the saddest day for the investors and end of anymore whistle blowers taking the pain and risk in complaining,” said the whistleblower in the email to SEBI.
