Second whistleblower letter launching personal attack on Infy CEO, surfaces

This is said to be the ‘undated’ letter that Infosys had earlier informed in regulatory filing

Days after a whistle-blower letter accused Infosys CEO Salil Parekh of “unethical practices”, another such letter has now surfaced, which has brought in several personal allegations against him.

Addressed to independent directors of the board and the chairman of Nomination and Remuneration Committee (NRC) at Infosys, the undated letter alleged that while Parekh continues to remain absent in the headquarters in Bengaluru, he prefers to stay in Mumbai to protect his personal investments in small companies.

The whistleblower, who claimed to be part of Infosys‘ finance team, has also alleged that Parekh was not able to control cost and was leading the company towards a low margin regime. In the three-page letter which has been seen by Business Standard, the whistleblower has also launched vicious personal attacks against Parekh.

While the company declined to comment, it is reliably learnt that Infosys had earlier informed the exchanges on October 22 about receiving two whistleblower mails including an undated one. The letter which has now been leaked to media, is said to be the same undated letter…

Even God can’t tweak Infosys’ financial numbers, says Nandan Nilekani

“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.

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.

Nilekani steps in as Infosys investors fume over whistleblower complaints

EY, Shardul Amarchand to conduct probe; CEO, CFO recuse themselves

Infosys co-founder and company Chairman Nandan Nilekani has once again emerged as the man of the moment even as the firm he leads grapples with another crisis-like situation and an erosion of more than Rs 53,000 crore in market cap following allegations of unethical practices.

As soon as the markets opened on Tuesday after a holiday, Nilekani swung into action by informing the exchanges that the company was conducting an investigation into the complaints of a whistle-blower. Sources in the know said he attended an audit committee meeting at the Infosys campus on Tuesday. D Sundaram, Punita Kumar-Sinha, and Roopa Kudva are members of the committee.

“The chairman is in control of the situation and is engaged with all stakeholders to assuage the concerns of investors,” said a person familiar with the development. Nilekani steps in as Infosys investors fume over whistleblower complaint.

The company is also learnt to be looking into the circumstances in which confidential financial information was recorded and stored as claimed in the whistle-blower’s letter. However, this hardly helped the situation with the company’s share prices plunging 16.21 per cent to settle at Rs 643.30 on the BSE. This is the sharpest intra-day fall in Infosys shares in more than six years. It erased the IT major’s market cap by Rs 53,131 crore and dragged it below Rs 3 trillion.

Tech Mahindra’s Gurnani earned most, but Wipro’s Neemuchwala took home more

Gurnani earned Rs 1.46 billion in 2017-18, which is 3,150 times the median employee remuneration (MRE) at the company

 

While Tech Mahindra Chief Executive Officer CP Gurnani continues to earn the highest remuneration among IT giants, in gross salary terms most CEOs took home a modest package led by Wipro’s Abidali Neemuchwala.

Gurnani earned Rs 1.46 billion in 2017-18, which is 3,150 times the median employee remuneration (MRE) at the company. However, Gurnani’s remuneration consisted of Rs 1.42 billion in stock options granted to him in 2013 and exercised during the current financial year.

His actual gross salary component was Rs 27.7 million. In fact, Gurnani’s total earning in FY18 declined by 3 per cent compared to the previous year while his actual salary (minus earning from the stock options) grew almost 10 per cent.

During the same period, vice chairman Vineet Nayyar’s remuneration jumped 101 per cent to Rs 401 million. The percentage increase in MRE for Tech Mahindra employees in FY18 was 9.19 per cent, while the fiscal year itself saw the company shedding headcount by a little less than 5,000.

“An increase of 0.22 per cent was given to employees during the year under review. There was an increase of 8 per cent in the remuneration of managerial personnel mainly on account of exercise of stock options granted earlier,” the company said in its annual report.(TECH MAHINDRA SHARE PRICE )

Neemuchwala on the other hand took home Rs 182.3 million during the same period, of which Rs 63 million consisted of gross salary and a little more than Rs 100 million was in the form of stock options. His remuneration which is almost 338 times of the MRE, increased by 34.5 per cent during the year. The MRE of employees across the company increased 3.25 per cent during the financial year from Rs 5,23,000 to Rs 5,40,000.

Even Salil Parekh, who took over as Infosys CEO in the final quarter of the last financial year, earned almost Rs 40 million, 273 times the MRE at the company. His predecessor, Vishal Sikka, earned almost Rs 130 million, of which Rs 60 million was the gross salary before he resigned in August last year. Parekh’s earnings did not include the hefty stock options bestowed upon Sikka. The MRE for Infosys increased six per cent during the year.

TCS has maintained the lowest CEO MRE ratio of 212 with Chief Executive Officer Rajesh Gopinathan taking home Rs 125 million during the year. His gross salary component is the lowest among his peers at Rs 16.24 million. The rather modest earnings also reflect in the mere 0.57 per cent increase in MRE for TCS employees during 2017-18.

While HCL’s annual compensation numbers are not out yet, 2016-17 witnessed a five per cent rise in MRE. The overall slowdown in headcount has helped companies protect margins to some extent. According to estimates by JP Morgan researchers, reduction in employee expense accounted for almost 35- 40 per cent margin gain for Tech Mahindra between December 2016-17 and December 2017-18.

“Companies will need to get other structural margin levers to operate more strongly, given that utilisation may need to moderate from the current peak (85 per cent ex- trainees) and can no longer be relied upon to drive margins,” according to the JP Morgan report released last month.

News Source : BS 

Infosys to leave turmoil behind as Salil Parekh takes over as CEO today

Salil S Parekh will take over as the chief executive of Infosys on Tuesday

 

Salil S Parekh will take over as the chief executive of Infosys on Tuesday as the information technology (IT) bellwether looks to shed its past year of turmoil and forge ahead with a focus on execution and grow business by engaging clients via digital contracts.

For Parekh, a former Capgemini executive who rose through the ranks to be on its global board after successfully building its offshore base in India, the top job at Infosys will be his first that will put him under public scrutiny. So far, Infosys, listed on the Indian and global stock exchanges, has built its reputation on transparency and good corporate governance.

A lapse in disclosure by former CEO Vishal Sikka, who took charge in August 2014, about offering severance pay 10 times the standard contract to former chief financial officer Rajiv Bansal had escalated into a public spat between the board and the founders led by N R Narayana Murthy. This had resulted in the resignation of Sikka and R Seshasayee, then board chairman, last August, paving the way for co-founder Nandan Nilekani to return at the helm.

Nilekani realises that he has to stay longer at Infosys to ensure a smooth transition for Parekh, who will operate out of its headquarters in Bengaluru. Parekh will also need to fit in a culture of frugality that Murthy and Nilekani built over the past three decades, engage with in-house talent and ensure higher returns to stakeholders.

An operational man, Parekh had led the growth trajectory for Capgemini India as an offshore destination to deliver client projects and help the European firm remain competitive. During his tenure, Capgemini team grew from 800 people to over 85,000 people in India, which included leading the acquisition of iGATE Corp....

Read more: Infosys CEO Salil  S Parekh