Probe gives Infosys clean chit in Panaya, Skava acquisition cases
24 June 2017
Two internal investigations by Infosys into alleged improprieties related to two acquisitions by the IT services company found no evidence of wrongdoing, it said on Friday.
The findings, released in a statement a day before the company's annual shareholder meeting, may quell some of the investor disquiet that has buffeted Infosys in recent months.
Infosys commissioned law firm Gibson Dunn and Crutcher and consultancy firm Control Risks to look into allegations that a whistleblower made against the company in February.
The accusations included improprieties in the acquisitions of Panaya, a New Jersey-based automation technology provider, and Silicon Valley start-up Skava, as well as inappropriate compensation paid to Infosys Chief Executive Vishal Sikka.
The letter had alleged that Infosys overpaid to buy Panaya and Skava in 2015 in return for kickbacks with finger-pointing at the top management. Panaya was acquired for $200 million and Skava for $120 million.
The whistleblower also accused Sikka of requesting that improper deals be made with customers, and that the company's mergers and acquisitions team acted without proper approvals.
A letter from Gibson Dunn to the Infosys audit committee - published along with the company statement -- said that the investigation found "no evidence whatsoever" of wrongdoing by Infosys, its directors or its employees.
Besides the whistleblower allegations, Infosys has also been rocked by accusations by some of its founders of lapses in corporate governance.
In early February TV channels reported that the company's founder promoters, led by its first chairman N R Narayana Murthy, wrote to the board to express concerns about executive pay rises and severance deals given to two former executives.
Murthy didn't answer a call from Reuters seeking comment on the Gibson Dunn report that also said it "found no evidence that the CEO received excessive variable compensation or incurred unreasonable expenses".
The internal inquiry also reviewed the results of an earlier investigation by Indian law firm Cyril Amarchand Mangaldas (CAM) on the departure of its CFO and on the veracity of its findings.
"We also concluded that CAM's two previous investigations were thorough and that their findings and conclusions were reasonable and credible based on the evidence," the Gibson Dunn letter said.