Whistleblower group alleges Infosys of using unethical practices to boost revenue numbers
A whistleblower group has surfaced once again to complain against Bengaluru-based information technology services firm Infosys. This time the anonymous group, calling itself "ethical employees," has alleged that Infosys is taking unethical steps to boost the firm's short term revenue and profit numbers, reports the Economic Times.
The group has reportedly written to the Infosys Board and the US stock exchange watchdog Securities and Exchange Commission about the alleged irregularities. The complainants also say they have proof of emails and voice recordings to back their claims.
The letter alleges that chief executive Salil Parekh is bypassing reviews and approvals for larger deals, according to the financial daily.
"He (Parekh) directs them to make wrong assumptions to show margins. (The) chief financial officer or CFO is complaint 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 alleges, says the daily ET.
The complainants have requested the auditors to check deal proposals, margins, undisclosed upfront commitments made and revenue recognition, ET said.
"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 told TechCircle when asked about the allegations.
This is not the first time that Infosys has faced such allegations. A whistleblower had earlier alleged irregularities in the Infosys-Panaya deal.
The IT giant had written off most of the value of the $200 million acquisition of the Israeli startup and was reportedly one of the reasons why former chief financial officer Rajiv Bansal quit the firm. The allegations also saw the exit of former chief executive Vishal Sikka.
During the past few quarters, Infosys has performed better than its peers Tata Consultancy Services and Cognizant even as the industry faces uncertainty amid financial sector woes and global economic downturn. Surprisingly, Infosys had even improved margins in the last quarter.