April 16, 2018
A day after Infosys decided to sell its subsidiary Panaya and Skava, a whistleblower on Saturday wrote to market regulator Sebi demanding a probe into these transactions.
Panaya was acquired in 2015 under the then Infosys CEO Vishal Sikka who later had to resign over the differences between board members and the founders including NR Narayana Murthy. And one of the issues that led to Sikka’s removal was the acquisition of Israel-based IT firm Panaya.
The Panaya controversy first began after two anonymous letters a year ago alleged wrongdoing and kickbacks in the deal. Following the allegations, Infosys set up an internal audit committee to probe the charges.
The committee found no evidence supporting the charges in the deal and gave clean chit to the board. However, it did not go down well with Murthy who demanded the board to make the report public. Infosys rejected the request.
A year later, Infosys on Friday said that it has initiated identification and evaluation of potential buyers for its subsidiaries – Panaya and Skava. The Bengaluru-based IT firm informed that the corresponding write-down in the investment value of Panaya was $90 million. Infosys had acquired the Israeli firm in $200 million.
The whistleblower wants Sebi to fix the responsibility of the board which first decided to buy the Israeli IT firm and now wants to sell it in just three years.
In an e-mail to Sebi and SEC, the whistleblower said that the Infosys has written down almost 50 per cent value of Panaya without assigning any reason.
“Where is the board accountability in this whole transaction? he asked. “The members of the earlier board – Ravi Venkatesan, Kiran Majumdar, Punita Sinha and Roopa Kudva – who participated in approving and defending these acquisitions are still in the current board. Should they not resign taking moral responsibility for this disaster?” the whistleblower further said.
The Infosys board under chairman Nandan Nilekani had also given a clean chit to the controversial deal. It said there was no merit in the allegations of wrongdoing.
“After careful consideration led by our Chairman, the Board reaffirms the previous findings of external investigations that there is no merit to the allegations of wrongdoing,” Infosys had said in a statement.