Capital market regulator Security Exchange Board of India (Sebi) will reportedly initiate a fresh probe into a corporate governance complaint against IT major Infosys in connection with the Panaya deal.
According to Business Standard, the involvement of several board members of the Bangalore-based software exporter could come under the scanner of the regulator.
In June, Sebi had closed a probe saying that were no merits in the charges made by an anonymous whistleblower against the IT giant's acquisition deal. The whistleblower had alleged corporate governance lapse by Infosys board members when the company bought Israeli firm Panaya for $200 million in February 2015.
The change in Sebi's stance and its plan to reinvestigate comes at a time when Infosys is facing turbulence with the ongoing war of words between co-founder N R Narayana Murthy and the board.
On August 18, Vishal Sikka had also resigned from his position as the Chief Executive Officer (CEO) and Managing Director (MD) of Infosys, citing personal attack.
The company board too blamed Murthy for Sikka's exit and said that the co-founder had put the CEO under "continuous assault" and made "inappropriate demands."
Murthy even claimed in an email to some of his advisers that he had been told by at least three independent directors of the company that Sikka was not a CEO material.
Sebi's change in stance could also be due to recommendations received from the Narendra Modi government, Business Standard reported.
Murthy's crusade against unsatisfactory corporate governance standards within the company has deteriorated his relation with the board and more importantly with Sikka.
Murthy had flagged the issue related to the lapse of corporate governance, especially in the Panaya acquisition deal.
An international law firm was later appointed by the company to investigate the deal, which gave a clean chit. Soon after that, Murthy had written a mail to the board, asking them to make the investigation reports public. The board refused.
Infosys co-chairman Ravi Venkatesan had said that it would not be appropriate to make the investigation report public as it contained an enormous amount of details about the company.
The co-founder also wanted an explanation for former CFO Rajiv Bansal's objection to the deal and his subsequent exit from the company.
The whistleblower' letter had claimed that Panaya was struggling to raise money. Sources told Business Standard that the Infosys board overlooked several factors before going ahead with the decision to buy the firm.