Convergence Plus
Friday, June 5, 2020
Infosys was indulging in “unethical practices” to boost revenues, allege whistleblower

For India’s second largest IT services company, Infosys, whistleblowers just don't seem to be give up. In its latest incident, a whistleblower group, called Ethical Employees, has allegedly complained to the US Securities and Exchange Commission and the Infosys Board that the CEO was indulging in “unethical practices” to boost short-term revenues and profits.

In 2017 and 2018, a previous whistleblower had raised questions over corporate governance issues about Infosys.

The Indian regulator, SEBI had even set up a probe committee to find out whether the allegations were true or not. The whistleblower had questioned the ₹17.4 crore severance package of former CFO Rajiv Bansal and the financial irregularities in Infosys’ $200 million acquisition of Israeli software firm, Panaya.

Following the allegations and several developments later, the then Infosys CEO Vishal Sikka was forced to step down. He was replaced by the current CEO Salil Parekh with the co-founder of the company, Nandan Nilekani taking over as the non-executive chairman.

New allegations

This time, a whistleblower group has come out with a fresh set of allegations. It said it has recordings and mails to show that Infosys was indulging in such practices.

It has alleged that CEO Salil Parekh overlooks reviews and approvals for large deals. The report which first appeared in a financial newspaper, alleged that Parekh directs his key employees to make wrong assumptions to show margins. The group also claims that the CFO is compliant.

It alleges that several billion dollar deals of last few quarters had nil margin, and asked the company to get deal proposals, margins, undisclosed upfront commitments made and revenue recognition checked with the auditors.

Infosys apparently has placed the whistleblower complaint with the audit committee.

This time, the whistleblower’s allegations come with lot more details than the earlier one.

It talks about how the complainants were asked to not fully recognise visa costs in the quarter, and were pressurised to not immediately recognise $50 million in reversals in a contract.

It alleged that the CEO Salil Parekh and CFO Nilanjan Roy were pressuring the finance team to show more profits in their treasury management by taking risks and making changes to policies. (Source: The Hindu Businessline)

IT Ministry, Google tie up for 'Build for Digital India'

Ongoing efforts by Kerala Startup Mission (KSUM) to encourage production of socially beneficial products have got a fresh fillip and recognition, as the Union Government has joined hands with Google to mobilise engineering students for innovative solutions.

The Union Ministry of Electronics and Information Technology and Google India have tied up under a six-month programme that features learning and mentorship activities.

The programme, christened ‘Build for Digital India’, will see Google providing mentorship by its officials as well as other experts, said Siddhant Agarwal, Programme Coordinator, Google Developer Relations at the KSUM-organised IEDC (Innovation and Entrepreneurship Development Centre) Summit held at Kodakara near Thrissur.

The deadline for ‘Build for Digital India’ is October 31, he told the 4,000 delegates and 100 startups at the conclave in Sahrdaya College of Engineering and Technology. The details are available at

Agarwal noted that India has a good number of nascent firms that provide solutions for problems related to society at a large. He particularly lauded startups such Genrobotics that make the popular Spandan robotic scavenger (which can detect cardiac problems in advance) and the breast cancer-screening device called NIRAMAI besides AIR-INK that makes ink from gaseous effluents generated by air pollution due to incomplete combustion of fossil fuels.

Earlier in his inaugural address, KSUM Chief Executive Saji Gopinath said that entrepreneurship is in itself primarily driven by people’s knowledge and passion for innovation. The major secret behind the success of entrepreneurship such as Facebook and Amazon is that they addressed hidden problem that had been there for years. (Source: The Hindu Businesline)

ITU to Debate Telcos’ Usage of 5G Band

Spectrum regulators at the Geneva-based International Telecom Union (ITU) are set to debate today a proposal from the telecom department, backed by the Indian Space Research Organisation (ISRO), to slash the transmission capability of mobile base stations operating in the coveted 26 GHz millimetre wave spectrum band – widely considered among the most efficient airwaves for ultra-fast 5G services.

The national space agency has convinced the Department of Telecommunications (DoT) to push for a sharp cut in the transmission power of mobile base stations operating in this core 5G band to a measly 0.5 watts, which is an 80th of the standard 40 watts radiated by normal base stations, according to people aware of the matter.

The reason, they said, is that ISRO wants a small chunk of about 10% of the 26 GHz spectrum band for satellite services and wants zero interference from 5G mobile networks using the same airwaves in future.

The matter is likely to be debated at the ITU meeting where India’s position on 5G spectrum bands and technology conditions will be thrashed out. After this, it will be discussed at the ITU’s World Radio Communications-2019 conference in Egypt, starting October 28, where regulators are meeting to finalise the rules of operating 5G globally in various spectrum bands, including 26 GHz.

The development has triggered a sense of disbelief in the telecom industry, with experts saying the proposed restriction in the transmission power of mobile base stations would destroy 5G business case for India in 26 GHz band as financially stressed telcos would be forced to make investments in thousands of additional base stations to maintain basic 5G coverage, a scenario that would sharply increase 5G roll-out costs and make services unaffordable for the consumer.

“The Department of Space does not have any specific comments to offer at this stage on this subject,” an ISRO spokesman said in a written response to ET’s queries. Queries to telecom secretary Anshu Prakash remained unanswered till press time on Sunday. (Source: Economic Times)

Indian IT Services Firms See No Big Blowback from Brexit

Firms expect business to be as usual, with Europe and UK firms still looking to outsource tech. Indian IT services providers are unlikely to be negatively impacted by Britain’s decision to leave the European Union, commonly referred to as Brexit, as they are seeing steady growth in the UK and European markets.

“It is unlikely to have a negative impact on Indian tech because the UK will want to create new partnerships,” said Sangeeta Gupta, senior vice-president, Nasscom, the IT services industry lobby.

Some of the large IT services companies have seen faster growth in the UK and Europe than from their traditional US market in the past four-five quarters. Companies expect business to be as usual, and some regions in Europe and the UK are still picking up outsourcing of technology services, said Kuldeep Koul, lead analyst at ICICI Securities.

The UK government last Thursday clinched a last-minute deal with the European Union to exit. But the Boris Johnson-led British government has to get Parliament approval for the same, for which it has reportedly sought an extension till October 31.

Large tech services firms are keenly watching the situation, but companies such as WNS seem confident about their deal pipeline and automation-focused projects in the region. “Whilst for some, exposure to the UK economy looks like a risk to the business, WNS’s management is adamant that the UK pipeline remains very strong with clients firmly committed to existing plans,” Tech Market Review wrote in a report.

“Perhaps, we shouldn’t be surprised, indeed, many of WNS’s services are of course counter cyclical – not just traditional BPO cost-cutting but automation and procurement services are all very attractive in environments when “pennies have to be counted” and efficiencies gained," it said. The report also pointed out that, "WNS must continue to push on its automation drive but remains a business in good shape with strong visibility to double-digit organic growth.” The IT services sector is, however, a little cautious about delays in decision making.

“...there will be some industry or companies who do not know whether there’s going to be a deal or no-deal Brexit, so they do not know what will happen to their market. So, they may have taken a pause on some discretionary expenses; then there is going to be some impact,” said Koul of ICICI Securities. Gupta of Nasscom said that "the uncertainty and how it prolonging is what would be worrisome".

As per Gupta, business is now continuing for IT firms, but faster decisions would help the sector focus. For example, she said, some banks, which are clients of IT firms, may have to shift headquarters from the UK to Europe or vice versa, post-Brexit. (Source: Economic Times)

Airtel Urges Trai to Postpone Scrapping of IUC

Bharti Airtel has urged the telecom regulator to postpone the scrapping of interconnection usage charges by at least three years from the planned January 2020 deadline, saying traffic symmetry between networks has not been achieved and over 400 million mobile users continue to use 2G networks, people close to the regulator said.

“The (London-based) GSMA too has predicted that 12-13% of customers will continue to use 2G handsets till 2025,” Airtel said in its submissions to the Trai, which had sought comments on a proposal to defer the introduction of a zero interconnection usage charges regime.

“Traffic from the 4G-only operator continues to be on the higher side, both in terms of absolute magnitude and percentage,” Airtel said, adding that this indicated “traffic symmetry has not been achieved.”

Reliance Jio Infocomm, which operates India’s only nationwide 4G network, has opposed the move to defer the zero-IUC regime. In its submission, it said Trai’s proposal was created to incentivise Airtel and Vodafone Idea, which are yet to fully upgrade their networks to 4G standards. Jio said any deferment of the regime would adversely impact Trai and the government’s credibility, besides reducing investor confidence in the telecom sector and discouraging foreign and domestic investment.

Jio is currently a net payer of IUC, while Airtel and Vodafone Idea are net recipients, underlining the reasons for their respective stands.

At press time, Airtel did not reply to ET’s queries. Submissions of Vodafone Idea, which has historically opposed the zero-IUC regime, were not immediately available.

Airtel said in its submissions that “despite the massive deployment of 4G, the assumption regarding adoption of technologies is not proven.” It said 49% of its customers still use 2G handsets and only 17% of the company’s voice traffic was carried on 4G-VoLTE in June 2019 even 2-3 years after deployment of the upgraded network.

Trai’s latest IUC review comes barely two years after it cut the charge by 57% to six paise a minute and ordered its end from January 2020. Its view was that by end 2019, a majority of operators would move to packet switched technologies and the cost of terminating calls would be small. (Source: Economic Times)

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