The group has complained to the board of Infosys and the US SEC stating the complainants have emails and voice recordings to substantiate the claims
In the letters sent to the Infosys board and SEC, the group alleges that CEO Parekh is bypassing reviews and approvals for large deals
Bengaluru: The management of Infosys Ltd has been accused of taking “unethical" steps to boost short-term revenue and profits, by an anonymous group calling itself “ethical employees". The group has complained to the board of Infosys and the US Securities and Exchange Commission (SEC) stating that the complainants have emails and voice recordings to substantiate the claims. The story was first reported in The Economic Times in a report dated 21 October.
“The whistleblower complaint has been placed before the Audit Committee as per the Company’s practice and will be dealt with in accordance with the Company’s whistleblowers policy," Infosys said in a response to a query from Mint.
In the letters sent to the Infosys board and the SEC, a copy of which Mint has seen, the group alleges that CEO Salil Parekh is bypassing reviews and approvals for large deals. “He (Parekh) directs them to make wrong assumptions to show margins. CFO is compliant and he prevents us from showing in board presentations large deal issues. Several billion-dollar deals of last few quarters have nil margin," the letter states.
In the letter, the complainants have asked the auditors to check deal proposals, margins, undisclosed upfront commitments made and revenue recognition. The letter further added that the complainants were asked to not fully recognise visa costs in the quarter and were pressured to not immediately recognise $50 million in reversals in a contract.
“In large contracts like Verizon, Intel, JVs in Japan, ABN AMRO acquisition, revenue recognition matters are forced, which are not as per accounting standards," the letter stated.
According to the letter, CEO Salil Parekh and CFO Nilanjan Roy were pressuring the finance team to show more profits in their treasury management. “In the board meetings, we were told not to present data on large deals and important financial measures as it will get board attention. CEO and CFO are asking us to show more profits in treasury by taking up risks and make changes to policies. This will provide short term profits," the letter stated.