The stock market regulators should make an example of Infosys, prosecute the board and management and not allow the company to settle without accepting guilt, one of the two Infosys whistleblowers told the watchdogs in an email.
The whistleblower, who is anonymous, had sent a letter earlier in the year detailing alleged lapses in the company’s acquisition of Israeli automation startup Panaya and had said the former CFO Rajiv Bansal’s severance had been negotiated by then CEO Vishal Sikka and then general counsel David Kennedy without board input.
Earlier this week, Infosys filed a consent application with the Securities and Exchange Board of India to settle issues related to disclosures and the fact that the board had not been informed prior to creating a severance agreement with Bansal. Infosys said the application process was based on an undertaking that it would neither admit nor deny the finding of fact or conclusion of law.
“While I understand it is a norm for large corporates to do backdoor settlements and protect their turf in case of genuine excesses, in Infosys case the regulator should deny that luxury and make the management accountable in the larger interest. Let me explain,” the whistleblower said in a letter to regulators that was also sent to media houses.
“This is the first time an internal whistle blower had took pain to unravel a fictitious payment to an ex-CFO and a suspicious acquisition with personal conflicts attributed to senior management. If this case is settled through the back door then no whistle blower in future will take the pain to expose such things.”
Infosys did not immediately respond to a request seeking comment.
“The impunity with which the board both past and present dismissed the allegations when they knew they were wrong is unprecedented and just for this reason SEBI should dismiss this settlement overture and prosecute the management and board to set an example,” the letter said.
The whistleblower said a settlement as currently envisioned by Infosys would be a sad day for investors.
“I think if SEBI really want to clean up the corporate world in India I think Infosys episode will be the test case. SEBI can really punish them and set a great example. If Infosys is allowed to settle the matter through the back door it will be the saddest day for the investors and end of anymore whistle blowers taking the pain and risk in complaining.”
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