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Salil Parekh — the eye of the storm that surrounds Infosys

<ul><li>Salil Parekh’s induction into the post of Infosys CEO was supposed to mark a ‘fresh start’ for the company. </li><li>He is currently being accused of ‘unethical practices’ like reporting higher profits and revenues — and hiding it.</li><li>When he was brought on board in 2018, he was given more than $5 billion in cash to make large margin acquisition for Infosys.</li></ul>Salil Parekh was named the CEO of Infosys just in January last year was supposed to mark a ‘fresh start’ for the company after massive layoffs in 2017. In fact, he beat out internal candidates and former executives as he rose from being a business manager at Capgemini to the CEO of one of the biggest tech companies in india. Come 2019, Parekh’s being accused of ‘unethical’ practices like misreporting higher profits and revenues by a group of whistleblowers. The allegations against him also include overlooking reviews and approvals to secure larger deals. Here's a quick look at Parekh's story since he became CEO:

The Infosys clean-up under Salil Parekh seems to have come a full circle within 2 years

New Delhi, The <keyword id="156153" type="General" weightage="20" keywordseo="Ministry-of-Finance" source="Orion">Ministry of Finance</keyword> has <keyword id="6379081" type="General" weightage="20" keywordseo="summoned" source="Orion">summoned</keyword> Infosys MD and CEO, <keyword id="328377" type="General" weightage="20" keywordseo="Salil-Parekh" source="Orion">Salil Parekh</keyword> on Monday over continuing glitches in the new income <keyword id="11921177" type="General" weightage="20" keywordseo="tax-e-filing-portal" source="Orion">tax e-filing portal</keyword>. In a tweet, the <keyword id="65338" type="General" weightage="20" keywordseo="Income-Tax-Department" source="Orion">Income Tax Department</keyword> also said that the portal is not available since Saturday, August 21. Parekh has been summoned to explain to the Finance Minister the reason for the persistent glitches in the portal. "Ministry of Finance has summoned Sh Salil Parekh, MD &amp; CEO @Infosys on 23/08/2021 to explain to hon'ble FM as to why even after 2.5 months since launch of new e-filing portal, glitches in the portal have not been resolved. In fact, since 21/08/2021 the portal itself is not available," the department said. The new income tax e-filing portal developed by Infosys was launched on June 7 in a bid to ease the tax filing process and expedite the refund issue. However, taxpayers have been facing several problems in using the portal since its inception. In July, the Union Finance Ministry asked the Institute of Chartered Accountants of India (ICAI) to constitute a seven-member task force to look into the technical issues facing the new Income Tax e-filing portal developed by Infosys. In line with the directive, the ICAI constituted a team to analyse the issues. During the recent Monsoon Session of Parliament, Minister of State for Finance Pankaj Chaudhary said in a written reply to the Lok Sabha that Infosys has been paid a total of Rs 164.5 crore under the project. He had said the government launched the new income tax e-filing portal as part of the Integrated E-filing and Centralised Processing Centre 2.0 Project. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/personal-finance/news/timeless-investing-lessons-from-legends-warren-buffett-peter-lynch-and-john-bogle/articleshow/85503124.cms">Timeless investing lessons from legends Warren Buffett, Peter Lynch and John Bogle</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/tech/apps/news/clubhouse-removes-personal-information-from-afghan-users-accounts-for-safety/articleshow/85530702.cms">Clubhouse removes personal information from Afghan users accounts for safety</a>

Finance Ministry summons Infosys CEO over glitches in IT e-filing portal

The share price of Infosys fell by 16.2% a day after whistleblowers complaint on its top management turned public, on Tuesday (October 22). That’s a wealth erosion of about ₹53,000 crore (about $7 billion). It also hit a lower circuit and closed at ₹643 per share. This is due to a whistleblower complaint which alleged that the CEO and CFO top management put pressure on them to not recognise the reversal of $50 million on FDR contracts as it will slash profits. Two anonymous whistleblowers accused the CEO Salil Parekh and CFO Nilanjan Roy of concealing information from auditors and keeping large deal information from the board. But, investors seem to fear that this may only be the tip of the iceberg. And, this is not the first time that Infosys has been accused of ‘corporate governance’’ issues. In fact, the founder of the company and the promoter group has been vocal<a href="https://economictimes.indiatimes.com/markets/stocks/news/infosys-promoters-including-murthy-nilekani-offer-shares-worth-rs-2038-crore-for-buyback/articleshow/60347494.cms?from=mdr"> of possible irregularities</a>, especially during the acquisition of Panaya for $200 million. This was of course, two years back. Ever since, the CEO Vishal Sikka and the CFO R Seshasayee have quit after blaming the founder Naranya Murthy of ‘personal attacks’ on them. The board too had been scrubbed clean and changed by one of its founders Nandan Nilekani but as it seems to be, the troubles are far from over. The severity of the fall in the share price today shows that investors are more worried about the standard of governance at one of India’s most famous home-grown companies that was once touted to be a benchmark in corporate governance. As per he whistleblower complaints, millions in reversals were not added into the accounts, to make profits ‘look good’. Amongst other things, whistleblowers said that Even without a possibly fake facelift, Infosys has been losing out to its competitors. A research report by Nomura has maintained its ‘neutral’ rating on the company preferring TCS over it. “We expect calendar year growth momentum to moderate in the second half below double digits as it should be seasonally weak with furloughs in the third quarter. Incrementally, outlook is weak in retail, and BFSI remains soft which is 50% of revenues combined), though performance and outlook on other verticals is strong,” the report said after Infosys declared its quarterly results. For a company which is growing slow, investigation and accusations will not help. Not during times of slowdown which it already has a lot of ground to cover. If more troubles come out of the Pandora’s box, Infosys will risk comparison to the likes of Satyam Computers which went down in 2009 after the promoter Ramalinga Raju tried to merge it with another infrastructure company he runs, failed and declared his role in a scandal that hit the credibility of entire India Inc.

Infosys lost $7 billion in share value due to $50 million whistleblower complaint-- showing that governance is bigger than money

<ul><li>The pandemic created 573 <keyword id="9858714" type="General" weightage="20" keywordseo="new-billionaires" source="Orion">new billionaires</keyword> at the jet rate speed of — one every 30 hours.</li><li>Every 33 hours, a million crashed into <keyword id="591923" type="General" weightage="20" keywordseo="extreme-poverty" source="Orion">extreme poverty</keyword> during the pandemic.</li><li>“The super-rich have rigged the system with impunity for decades and they are now reaping the benefits,” said Gabriela Bucher, executive director of <keyword id="226811" type="General" weightage="80" keywordseo="oxfam-international" source="Orion">Oxfam International</keyword>.</li><li>In East Africa, one person dies of hunger every minute.</li></ul>The income of 99% of humans fell because of COVID-19, but the rest 1% is doing much better than ever. The pandemic created 573 new billionaires at the jet rate speed of — one every 30 hours. On the darker side, a million people crashed into extreme poverty every 33 hours. It’s much expected as 125 million of jobs were lost in 2021. <cmsannotation type="cmsannotation" annotationid="Trillions of injected cash find their way into the billionaire bank vaults" comment="subhead" text="Trillions of injected cash find their way into the billionaire bank vaults">Trillions of injected cash find their way into the billionaire bank vaults</cmsannotation> <div type="image" title="Richest and the poors" msid="91734702" hostid="261"></div> The total wealth of the world’s billionaires is now almost equal to 13.9% of global GDP — a three-fold jump from a mere 4.4% in 2000. The report also said that the wealth of billionaires has risen more in the first 24 months of COVID-19 than in the last 23 years combined. “Billionaires’ fortunes have not increased because they are now smarter or working harder. Workers are working harder, for less pay and in worse conditions. The super-rich have rigged the system with impunity for decades and they are now reaping the benefits,” said Gabriela Bucher, executive director of Oxfam International. Most of this wealth increase came from the trillions of dollars that the governments injected into the world economy to tackle the pandemic and avoid an economic collapse. The side effect however was that it dramatically drove up asset prices, and with this the net worth of billionaires and the asset-owning classes. “They have seized a shocking amount of the world’s wealth as a result of privatization and monopolies, gutting regulation and workers’ rights while stashing their cash in tax havens — all with the complicity of governments,” said Bucher. <cmsannotation type="cmsannotation" annotationid="Hunger deaths, missing meals and overdue bills await the poor" comment="subhead" text="Hunger deaths, missing meals and overdue bills await the poor">Hunger deaths, missing meals and overdue bills await the poor</cmsannotation> <div type="image" title="Hunger missing meals" msid="91734688" hostid="261"></div> The income of the poor saw a steep decline of 40% during the pandemic, which was 6.7% lower than the pre-pandemic projections. In fact it is leading to hunger deaths especially in East Africa, where one person dies of hunger every minute. “Millions are skipping meals, turning off the heating, falling behind on bills and wondering what they can possibly do next to survive. This grotesque inequality is breaking the bonds that hold us together as humanity. It is divisive, corrosive and dangerous,” she added. According to Oxfam estimates, it would take 112 years for an average person in the bottom 50% to make equivalent to someone in the top 1% makes in a year. The richest 10 men have greater wealth than the poorest 40% of humanity combined. These billionaires are collectively worth $12.7 trillion – a real-term increase of $3.78 trillion (42%) during the pandemic, the report said. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/international/news/not-just-india-many-countries-are-protecting-their-wheat-to-keep-daily-bread-affordable/articleshow/91733019.cms">Not just India, many countries are protecting their wheat to keep daily bread, affordable</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/india/news/it-giant-infosys-reappoints-salil-parekh-as-ceo-and-md-for-next-five-years/articleshow/91734316.cms">IT giant Infosys reappoints Salil Parekh as CEO and MD for next five years</a>

Billionaire wealth rose more in 2 years than in the last 23 years combined

<ul><li>The IT services major declared a dividend of ₹9.5 a share. </li><li>The number of $10 million-plus clients went up by 2 and the number of million-dollar clients rose by 13.</li><li>The company has suspended guidance for the coming quarter.</li></ul>Indian IT services major Infosys saw a dip in its revenue growth by 0.8% in constant currency terms in the latest fourth quarter. For the full year, net profit up 8% at ₹16,639 crore; revenue rises 9.8% to ₹90,791 crore. However, quarter-on-quarter net profits fell by 2.9% and margins dipped by 0.7% Infosys <a href="https://www.businessinsider.in/stock-market/markets/news/coronavirus-crisis-has-made-infosys-tcs-and-hcl-tech-stocks-so-cheap-this-may-be-the-time-buy-but-hold-for-at-least-a-year/articleshow/74909945.cms">shares</a> jumped by nearly 5% ahead of its earnings announcement today. The Board recommended a final dividend of ₹9.50 per equity share for the financial year ended March 31, 2020. <div type="image" title="Infosys share price (3)" msid="75252655" hostid="261" caption="&amp;lt;p&amp;gt;Infosys share price over the past month&amp;lt;/p&amp;gt;"></div> The number of $10 million-plus clients went up by 2 and the number of million-dollar clients rose by 13. The company signed $9 billion worth of large deals in the last 12 months. “We don’t know if this crisis will last a couple of quarters or more,” CEO Salil Parekh said. But he struck a confident note while adding that the crisis will push more clients to look for the adoption of technology to reduce costs and for digital transformation. Digital business was 42% of the total revenue at the end of March 2020. “Manufacturing sectors have been impacted in a big way, media and entertainment will also struggle. There may be a delay in 5G rollout,” Chief Operating Officer Pravin Rao said. A weaker rupee added 2% to the profit margin, revealed Chief Financial Officer Nilanjan Roy. The Indian currency has weakened further since and it is good for the company, which earns more than 90% of its revenue in foreign currencies like dollars and euros. <div type="image" title="infy segmetns" msid="75252564" hostid="261" caption="&amp;lt;p&amp;gt;Infosys revenues by business segments in Q4FY20&amp;lt;/p&amp;gt;"></div> “We have provided all the information that SEBI has requested. There is nothing else we need to provide at this stage to SEBI,” Parekh said addressing a question on the probe into the whistleblower allegations. Infosys employees working from home Around 93% of the Infosys’ employees at working from home. In view of the Coronavirus pandemic, the company has decided to not give out any promotions or increments this year. It also clarified that it won’t be firing anyone or ask anyone take furlough. Before Infosys, its competitors Tata Consultancy Services (<a href="https://www.businessinsider.in/business/corporates/news/tcs-earnings-q4-2020-profits-margins-and-revenue/articleshow/75182689.cms">TCS</a>) and Wipro have already indicated big changes in the works due to the impact of COVID-19. While <a href="https://www.businessinsider.in/business/corporates/news/wipros-hiring-will-be-slower-in-the-coming-months-and-current-employees-may-be-asked-to-go-on-leave-without-pay/articleshow/75173292.cms">Wipro</a> hasn’t ruled out lay-offs or furloughs, TCS plans to honour its offers to freshers and shift to the 25/25 operating model. The 25/25 model basically is an indication that <a href="https://www.businessinsider.in/business/corporates/news/tcs-ceo-says-the-business-model-is-20-years-old-and-its-time-to-go-employee-lite/articleshow/75243124.cms">work from home is here to stay</a> with the company planning to reduce the in-office time of its employees to 25% by 2025. It’s going to get worse before it gets better Like <a href="https://www.businessinsider.in/business/corporates/news/wipro-takes-14-16-million-covid-19-hit-in-q4-skipping-guidance-and-increments/articleshow/75159717.cms">Wipro</a>, Infosys suspended giving a guidance for the coming quarter. TCS, who normally does not issue guidance, was upfront about the fact that the next two quarters are probably going to see a downturn before things pick up in the third and fourth quarters of 2021 to level at par with the respective quarters in 2020. See also: <a href="https://www.businessinsider.in/business/corporates/news/wipro-takes-14-16-million-covid-19-hit-in-q4-skipping-guidance-and-increments/articleshow/75159717.cms">Wipro takes $14-16 million Covid-19 hit in Q4 skipping guidance and increments</a> <a href="https://www.businessinsider.in/business/corporates/news/tcs-ceo-says-the-business-model-is-20-years-old-and-its-time-to-go-employee-lite/articleshow/75243124.cms">TCS CEO says the business model is 20 years old and it's time to go employee-lite</a> <a href="https://www.businessinsider.in/stock-market/markets/news/coronavirus-crisis-has-made-infosys-tcs-and-hcl-tech-stocks-so-cheap-this-may-be-the-time-buy-but-hold-for-at-least-a-year/articleshow/74909945.cms">Coronavirus crisis has made Infosys, TCS, and HCL Tech stocks so cheap, this may be the time buy — but hold for at least a year</a>

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Salil Parekh — the eye of the storm that surrounds Infosys

The Infosys clean-up under Salil Parekh seems to have come a full circle within 2 years

Prabhjote Gill

Finance Ministry summons Infosys CEO over glitches in IT e-filing portal

IANS

Infosys lost $7 billion in share value due to $50 million whistleblower complaint-- showing that governance is bigger than money

Katya Naidu

Billionaire wealth rose more in 2 years than in the last 23 years combined

Vaamanaa Sethi

Infosys’ revenue, profit and margin in the red as Coronavirus sweeps over the global economy

Prabhjote Gill

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