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Infosys' Panaya deal: CEO Vishal Sikka gets all-clear from US law firm

Investigation details were released by Infosys on eve of the company's AGM

Ayan Pramanik & Raghu Krishnan  |  Bengaluru 

Vishal Sikka
Infosys CEO Vishal Sikka. Photo: PTI

An independent probe had cleared Chief Executive Officer over allegations of personal gains made during the acquisition of Israeli software firm Panaya, the company said on Friday.

The details of the investigation by US law firm were released by on the eve of its annual general meeting on Saturday. 

The clean chit will deflect any criticism against Sikka, except for the ambitious target he had set when he joined in August 2014.  The growing rift between the management and its founders led by NR is likely to come up for discussion at the AGM. The other issue shareholders may raise is the watering down of the revenue target—$20 billion by 2020—set by when he took over as CEO three years ago. 

In February, an anonymous employee had written to the board, its founders, and stock market regulators in India and the US, alleging wrongdoing by in the $200 million acquisition of

The mail accused of using resources for personal reasons.

It also said differences over the deal led to the exit of former chief financial officer Rajiv Bansal, who was offered a severance package of more than Rs 17 crore. Murthy had objected to the severance package, accusing the board of diluting disclosure norms.

Since then, Murthy and his aides,  former directors TV and V Balakrishnan, have sought an investigation into Bansal’s severance package.

had commissioned to investigate the charges, which interviewed over 50 witnesses and went through mails, documents and public records.

“We found no evidence supporting the whistleblower’s allegations regarding the acquisitions – there were no conflicts of interest or kickbacks, required approvals for the acquisitions were obtained, thorough due diligence was conducted, the valuations of the target done by an outside financial advisor were reasonable, and the purchase prices were within the range of values determined by that advisor,” stated in its report to the audit committee of the board. 

acquired on February 16, 2015, for $200 million and valued the company at a 25 per cent premium over the $162 million arrived at by Series E investors one month before the deal. was struggling to raise money and employees were leaving the company, the complainant wrote in the letter. 

“The Indian law firm Khaitan & Company was appointed to provide legal counsel on Indian law matters associated with the anonymous complaint, independent investigation and related matters. The auditors of the company performed select procedures related to the independent investigation as part the audit for the year ended March 31, 2017,” said in a statement. 

The company informed the about the findings of the investigation.  

Following Murthy’s accusations, has included DN Prahlad on the board and elevated Ravi Venkatesan as co-chairman and strengthened disclosure norms.

First Published: Sat, June 24 2017. 02:07 IST