Infosys on Friday said that its audit committee found no evidence of financial impropriety or executive misconduct by the company in its investigiation into allegations contained in the anonymous whistleblower complaints the company disclosed on October 21, 2019 and determined that the allegations were substantially without merit.
"The Audit Committee conducted a thorough investigation with the assistance of independent legal counsel Shardul Amarchand Mangaldas & Co. and PricewaterhouseCoopers Private Ltd. (collectively “investigation team”). The findings of the investigation were adopted by the Board of Directors of the Company. The Audit Committee concluded that no restatement of previously announced financial statements or other published financial information is warranted," the company said in its press release.
Infosys Chairman Nandan Nilekani said, “I am pleased that after a rigorous investigation, the Audit Committee has found no wrongdoing by the Company or its Executives. CEO Salil Parekh and CFO Nilanjan Roy are strong custodians of the Company’s proud heritage. Salil has played a key role in reinvigorating the organization and driving momentum and the Board is confident that he will continue to execute on the company’s new strategic direction successfully.”
The investigation team’s review of information pertaining to the allegations encompassed the time period January 1, 2018 to September 30, 2019. No limitations or restrictions were placed on the investigation team’s access to information, and the Company, its directors and employees cooperated fully, the company added.
Below are the key findings on company matters -
The allegations regarding treasury policy are unsubstantiated. The Company strictly complied with its treasury policy, without any interference or pressure from either the CEO or CFO.
- The allegations regarding the visa costs are unsubstantiated. The costs incurred towards visas by the Company are appropriately accounted for.
- The allegations regarding large deal approvals are unsubstantiated. Large deals under the investigation team’s review were approved by the necessary stakeholders. In the case of one large deal, a post-facto approval was sought. The joint ventures were approved by the Board and the Audit Committee. No evidence was found suggesting CEO’s involvement in bypassing the deal approval process or issuing any instructions in this regard.
- The allegations regarding revenue recognition of three large deals/ JVs are unsubstantiated.
In the case of one large deal:
In relation to recognition of maintenance revenue, the investigation team has not come across any evidence to suggest that the decision to follow a Percentage of Completion (or “POC”) cost method for recognition of application maintenance revenue was forced. The Company exercised its judgment in deciding to follow a POC cost method. The selection of this method and the reasons for choosing the same were neither discussed with the Audit Committee nor disclosed in the financial statements of the Company.