Infosys is the top loser on the BSE since the opening bell today morning. The stock tanked 16% to Rs.645.35 and remains mired in the red.
A crisis seems to have emerged once again in the company as an anonymous whistleblower letter alleged that Infosys CEO, Salil Parekh window dressed the company’s books.
According to Deccan Hearld, this letter came from a group called, “Ethical Employees” and the letter accoused Parekh of using several unethical ways to show a boost in earnings. It is alleged that employees were asked not to fully recognise costs like those for visas of employees to improve profits. It also alleges that during the current quarter, there is a pressure of not recognising $50 million of the costs incurred by the company.
The letter also said that in case of large contracts like Verizon, Intel and ABN Amro acquisition, the revenue recognition is not as per accounting standards. The letter also alleges that the company’s CFO Nilanjan Roy has collaborated with Parekh in fudging the numbers.
This 4-page letter was received over a month ago and it has come to the light of the media only now.
In response to the complaint, the company said that it is investigating the issue. “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 whistleblower policy.
If one may recollect, two years ago, former CEO, Vishal Sikka quit the company after he faced allegations from another whistleblower over corporate governance issues, regarding the payment of his salary and acquisition decisions.