Infosys Ltd chairman Nandan Nilekani on Wednesday defended the company’s co-founders and management over the recent whistleblowers’ allegations, assuring necessary steps will be taken if an investigation substantiates claims of misgovernance.
Infosys, he said, was committed to the highest standards of corporate governance and has responded responsibly and complied with applicable laws and best practices.
“Infosys has strong processes; even God can’t change the numbers of this company. Our finance team is feeling insulted by these allegations. But I don’t want to bias the investigation," Nilekani, a co-founder of the company, said at an analysts’ meet.
He added that Infosys has grown at an average of 11.4% in constant currency terms over the past four quarters, with CEO Salil Parekh playing a lead role in reinvigorating the organization and driving momentum.
On 21 October, Infosys said it has received complaints by whistleblowers alleging “unethical practices" by senior executives, including Parekh and CFO Nilanjan Roy, to boost short-term revenue and profit. A day later, Nilekani said in a stock exchange filing that the complaints were “being dealt with in an objective manner".
On Wednesday, shares of Infosys rose as much as 3.7%, before closing 2.37% higher at ₹712.30 on the BSE.
On the whistleblowers’ allegations that Infosys had bent rules in large deals, Nilekani said large-margin deals are decided entirely by the management and it is within its right to take those calls about margins. He added that while the company is unable to give a timeline on when the investigation will close, a summary of the ongoing probe will be provided after it is complete.
In a separate stock exchange filing, Infosys said it condemned the “mischievous insinuations made by anonymous sources against the co-founders and former colleagues, suggesting their involvement in the recent whistleblower allegations".
Earlier on Wednesday, Moneycontrol.com reported that a co-founder of Infosys and a former senior executive conspired with the whistleblowers to make allegations of governance failures.
Nilekani said in the filing that “these speculations are appalling and seem to be aimed at tarnishing the image of some of the most accomplished and respected individuals. I have deep regard for the life-long contribution of all our co-founders. They have built this institution and have served this company selflessly and even today, remain committed to the long-term success of Infosys".
The Bengaluru-based firm reiterated that the audit committee has appointed an external law firm to conduct an independent investigation into the allegations.
Analysts said Nilekani’s comments will build trust and confidence among investors.
“We have to appreciate that Nandan has come out and spoken, something that was long pending. Also, when someone like Nandan has put his personal reputation on the line, it goes to suggest that Infosys is an organization that is very upfront about governance processes, which is larger than any individual," said Sanchit Vir Gogia, chief analyst at Greyhound Research.