For the first time since the whistle-blower allegations rocked Infosys, its co-founder and chairman, Nandan Nilekani, on Wednesday came out in full support of the current management in execution of its growth strategy. He also vouched for “strong processes” in place at Infosys, saying that even god can’t tweak the financial numbers at the information technology (IT) services firm.
“Infosys has very strong processes. Even god can’t change (financial) numbers in this company. We have an outstanding finance team with people of highest integrity and they are actually feeling insulted due to these accusations,” Nilekani said at the post-earnings analyst call. “But, again, I don’t want to be biased when the investigation is on. So, let the report come.”
In a letter dated September 20, an anonymous group calling itself ‘Ethical Employees’ alleged that Infosys’ management was taking “unethical” steps to inflate short-term revenue and profit. According to the allegations, while around $50 million of visa cost had been deferred, revenue recognition in large deals was not in compliance with the accounting standards. The audit committee of the company is investigating the matter.
“Our goal is to close this (investigation) in the best possible time. I really can’t give any timeline because that will not be fair to the investigators,” Nilekani said.
Despite the distraction created by these whistle-blower allegations, the non-executive chairman of the board said, it was business as usual for the firm and the large deal flow remained robust on the back of strong support from customers.
“The deal flow continues to be as good as ever, and just in the morning, I saw an email on a large deal, which Salil (Parekh) had forwarded to me. So, we are doing very well with customers,” Nilekani said.
On the allegations of zero-margin large deals, the company said the management had the right to pursue its growth strategy and the board completely backed it. “I can assure that the board and the audit committee are extremely cognizant of large deals and the management is fully within its rights to select the large deals in the overall context of what needs to be achieved,” he said. “It’s entirely the prerogative of the management that at what margin they will take those up.”
Early in the morning, the Bengaluru-headquartered firm in a regulatory filing said that reports speculating the involvement of the company’s co-founders and former employees in the whistle-blower complaints were appalling and seemed to be aimed at tarnishing the image of some of “the most accomplished and respected individuals”.
The company assured that a fair probe was being conducted and actions would be taken in case of lapses. The company also said that despite frequent whistle-blower allegations, it would not make any change to its one-and-half-decade-old whistle-blower policy. “We get whistle-blower complaints all the time. If actions are to be taken, then we take it. In most cases, no action is taken. So, we close it. It doesn’t go the media,” Nilekani said.
Giving credit to CEO Salil Parekh for accelerating Infosys’ growth in the last one and half year, Nilekani said Parekh was playing a lead role in reinvigorating the organisation and driving momentum. “The strategy that the management is pursuing has the full support and endorsement of the entire board.”