In what be an important development in the Infosys whistleblower case, sources privy to the developments told CNBC-TV18 that the audit committee of Infosys as well as the external team of Shardul Amarchand, appointed to look into the whistleblower accusations that surfaced in October 2019, have completed the investigation into the accusations.

According to multiple people familiar with the development, both the reports are likely to be submitted to the Infosys board on January 10. The board will be meeting to clear the financial results for the third quarter of the financial year 2020.

When contacted Infosys said it did not want to comment. A source aware of the developments said, "Members of the audit committee as well as Shardul Amarchand will be making presentations to the board. The board will deliberate on the findings of the investigation and decide if more details are needed and based on that will release the report or make an announcement.”

On October 21, it came to light that an anonymous group calling itself ‘ethical employees’ had complained to the board of Infosys and the US Securities & Exchange Commission (SEC) alleging that the company is taking 'unethical’ steps to boost short term revenue and profits.

On the point of large deal, the whistleblower complaint alleged that chief executive officer Salil Parekh was bypassing reviews and approvals for large deals and that he directed employees from the finance team to make wrong assumptions to show margins.

It also accused the chief financial officer of being complaint in this and preventing Infosys employees from showing large deal issues in board presentations claiming that ‘several billion-dollar deals of last few quarters have nil margins’ and asked ‘auditors to check deal proposals, margins, undisclosed upfront commitments made and revenue recognition’.

On October 21, Infosys had released a statement indicating that it was looking into the allegations. "The company has received anonymous whistleblower complaints alleging certain unethical practices. These have 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,” it said.

It then released a more detailed statement attributing to chairman Nandan Nilekani. This is to inform you that the following statement is attributable to Nandan Nilekani, chairman of Infosys Limited. “One Board member received two anonymous complaints on September 30, 2019 one dated September 20, 2019, titled “Disturbing Unethical Practices” and the second undated with the title, “Whistleblower Complaint.”

Pursuant to our whistleblower practise, we have placed both complaints before the Audit Committee on October 10, 2019, and before the non-executive members of the board on October 11, 2019. These Complaints are being dealt with in an objective manner.

Additionally, on October 16, 2019, the company was made aware of a letter dated October 3, 2019, which was purportedly written to the Office of Whistleblower protection program, Washington D.C. This letter refers to the September 20, 2019 complaint and to e-mails and voice recordings in support of the allegations.

“Although we have not been provided with any of the e-mails or voice recordings, we will ensure that the generalised allegations are investigated to the fullest extent,” it said in the statement.

It also appointed an external law firm, Shadul Amarchand, to look into the case and recused CEO and CFO from the investigation to ensure independence. Since then, Nandan Nilekani has backed the management and put his confidence behind then. Addressing analysts earlier this month, Nilekani has said that he has full faith in the management and that "even god can't change Infosys numbers."

First Published:Jan 9, 2020 8:12 PM IST