Sebi chief Ajay Tyagi says Infosys probe underway

MUMBAI: The Securities and Exchange Board of India (Sebi) Chairman Ajay Tyagi said on Friday that a probe on IT major Infosys was underway following a whistleblower complaint against the company's top executives last month.

“Probe on Infosys is going on,” he told reporters on the sidelines of a CII event.

Earlier this week, Infosys chairman Nandan Nilekani said the company’s processes were very strong and that ‘not even God’ could change the reported numbers and that board supported the IT firm’s management in executing its strategy.

Last month, Infosys had informed that Sebi requested additional information from the company concerning the anonymous complaints.

A complaint by a group that calls itself "ethical employees" of Infosys had alleged CEO Salil Parekh and CFO Nilanjan Roy of indulging in “unethical practices” to boost short-term revenue and profits.

Earlier in the day, while speaking at the event by CII, Tyagi had pointed that within the financial sector, it is important to differentiate between financial markets and banking system, and added that lending is a different issue than investing.

Tyagi believes Indian capital markets have come a long way. “On equities side, we have world-class regulatory system. There has been progress on the bond side,” he said.

He, however, added much more needs to be done to bring in liquidity in the secondary market (for bonds).

Tyagi raised concerns that the IPO market had dried up. “This (IPO market) has to be kick-started with confidence building,” he said adding that the divestment plan should hit the market in a big way.

The government has planned to raise Rs 1.05 lakh crore from disinvestment in the current financial year. It had surpassed its asset-sale targets of Rs 1 lakh crore in 2017-18 and Rs80,000 crore in 2018-19.

The government can raise about Rs 1.1 lakh crore by selling its direct holding above 51 per cent in listed non-financial public sector undertakings (PSUs) or about Rs 2.5 lakh crore by selling its direct and indirect holding including stakes of LIC and other PSUs above 51 per cent in listed nonfinancial PSUs, according to data compiled by Kotak Institutional Equities.

The amounts are equivalent to 1-2 years of divestment targets. Thus, the government may have to consider outright privatisation of PSUs in the not too-distant future, said the report.