In a piece of shocking news, Infosys has garnered negative attention for implementing ‘unethical practices’ to increase their revenues and profit.
This comes right after the company was revealed to have the highest attrition rate in history.
A group of employees, calling themselves the ‘Ethical Employees’ have written a letter to the Infosys board and the US SEC, revealing the malpractices that are happening at Infosys, one of the leading IT companies of India.
As per the complaint, Infosys is practicing unethical methods to get its revenues, profits to increase.
Find out more about this unnerving accusation of Infosys right here!
Infosys CEO Accused Of Ignoring Reviews And Approval For Large Deals
A group of employees, who call themselves ‘ethical employees’ has raised this complaint to the board of Infosys and the US Securities and Exchange Commission (SEC), claiming they have audio recordings and emails to back their claims.
Through this letter, the complainants accuse the CEO, Salil Parekh of bypassing reviews and approvals for large deals.
The letter states, “He (Parekh) directs them to make wrong assumptions to show margins. CFO is compliant and he prevents us from showing in board presentations large deal issues…Several billion-dollar deals of last few quarters have nil margin.”
As per the letter, he also is using the company’s finances for personal trips, and avoids tax deductions during his travels to the US.
Multiple High-Level Exits Since Parekh’s Reign As CEO
Regarding Parekh’s credibility as a CEO, there have been as much as five high-level exits from Infosys ever since he took over as the CEO.
Rajesh Krishnamurthy, who was the president and head of Europe of Infosys, quit the company after an exceptionally long career of 26 years in Infosys.
In June, Sangita Singh, who was the executive vice-president and the head of the health care and life sciences vertical also resigned.
Nitesh Banga, the head of manufacturing, also resigned around the same time.
In August came the most shocking resignation at Infosys – M D Ranganath, the chief financial officer. Ranganath, too, had a long career of 18 months with Infosys.
Next in line to go was Ken Toombs, who was the global head of consulting at Infosys.
Complainants Asked To Hide Vital Information and Costs From The Board
Apparently, employees are asked not to disclose the entire data to the board, and only the good information, albeit incomplete, is to be shown.
“They ask us not to make key disclosures in 20F and annual report and to share only good and incomplete information with investors and analysts. This is a regulatory issue. We have mails and voice records and will share during investigation.”
The letter also states that the complainants were asked not to recognize full visa costs in the quarter. Additionally, they were also under pressure to not immediately identify $50 million in reversals in a contract.
“In large contracts like Verizon, Intel, JVs in Japan, ABN AMRO acquisition, revenue recognition matters are forced, which are not as per accounting standards,” the letter stated.
The complainants have stated that they have voice recordings and emails as evidence for their accusations.
Being one of the top IT companies in India, we certainly did not expect this from Infosys. Share your thoughts and opinions in the comments section below.
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