Infosys Ltd on Friday said an independent probe has found no proof to support a whistleblower’s allegations regarding kickbacks and conflict of interest in two acquisitions made by the company two years ago.
Independent auditors — international law firm Gibson Dunn & Crutcher LLP and risk consultancy specialist Control Risks — vetted the two anonymous complaints related to the company’s buyouts of Panaya Inc and Skava Systems Private Ltd in 2015. They failed to find any credible evidence supporting the allegations, according to a memorandum issued by Gibson Dunn.
According to Infosys, Gibson Dunn and Control Risks have now completed their detailed and extensive Independent Investigation and as they have described in the attached document, they did not find any evidence whatsoever of wrongdoing. “The company has also fully cooperated with all requests for information from Sebi regarding the anonymous complaints,” Infosys stated.
On February 21 and 22, Sebi forwarded to the company two anonymous complaints making allegations relating to the company. “The anonymous complaints were placed before the Audit Committee. The Audit Committee approved a comprehensive investigation into the anonymous complaints for which Gibson Dunn & Crutcher LLP…and Control Risks…were retained to conduct the investigation. Neither firm performs other work for the company,” Infosys said.
Khaitan & Company was appointed to provide legal counsel on Indian law matters associated with the complaint, independent investigation and related matters. The whistleblower accused improprieties in the acquisitions of Panaya Inc, a New Jersey-based provider of automation technology, and Skava, a Silicon Valley e-commerce start-up, as well as allegations of inappropriate compensation paid to Infosys chief executive Vishal Sikka.
The whistleblower also accused Sikka of requesting that improper deals be made with customers, while saying Infosys’ mergers and acquisitions team acted without proper approvals. The whistleblower had alleged that the $200 million paid by Infosys was 25 per cent more than what the firm was valued before the acquisition in a Series E funding round.
“… Required approvals for the acquisitions were obtained, thorough due diligence was conducted, the valuations of the target companies done by an outside financial advisor were reasonable, and the purchase prices were within the range of values determined by that advisor. We found no evidence of inappropriate contracting… We found no evidence that the CEO received excessive variable compensation or incurred unreasonable expenses for security, travel and the Palo Alto office,” Gibson Dunn said in its report to the Audit Committee.
Gibson Dunn said the investigation involved interviews of over 50 witnesses in India, US and elsewhere, the review of company policies.