INSUBCONTINENT EXCLUSIVE:
Country's best-known software exporter is facing an impossible trinity of sorts: Out of sales, margins and governance, Infosys can hit
only two goals at a time.Or so it would appear from yet-to-be-proven whistle-blower allegations against Chief Executive Officer Salil Parekh
and Chief Financial Officer Nilanjan Roy that they used hyper-aggressive accounting practices to hide from investors the lack of
profitability on large deals
co-founder and non-executive Chairman Nandan Nilekani, who returned to the Bangalore-based company two years ago during a previous crisis -
sparked by a set of different anonymous charges against Mr Parekh's predecessor, the former SAP executive Vishal Sikka, who was accused of
impropriety in a $200 million acquisition in Israel.That scandal culminated in an unseemly spat between Mr Sikka and the board on one side
Mr Sikka resigned in August 2017
The new board exonerated him, but by then the damage was done.Mind the Valuation GapIt's been a slow road to recovery
than at the depth of the last crisis
The risk is of a repeat of that slump.If investors start to believe that the culture at the software services provider, once seen as
against larger rival Tata Consultancy Services, or TCS, at the end of last month
Since the company's American depository receipts trade in New York, there's also the threat of expensive class-action suits.The
allegations are being evaluated by the audit committee and the board
The CEO and the CFO won't be a part of those deliberations
Whatever the truth of the whistle-blower's complaints, another protracted governance saga could be just as damaging.It might not be a bad
idea for a buyout fund to step in and take Infosys out of the glare of the public markets
As a private company, it could rediscover its moorings and find a new purpose in a digital world where clients increasingly want nimble,
cloud-based, on-demand software, rather than clunky, on-premise enterprise solutions.At $12 billion in the fiscal year that ended in March,
Infosys revenue is nowhere close to Mr Sikka's 2020 target of $20 billion
An operating margin of less than 23 per cent was lower than the near 26 per cent at TCS, according to data compiled by Bloomberg.After a
period of rehabilitation, Infosys should be able to deliver all three targets: sales growth, margins and good governance
Some private time could be just what it needs to get fixed.Follow TheIndianSubcontinent for latest election news and live coverage of
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