Is the Infosys House of B-1 Cards Starting to Fall?

Don Tennant

Amid signs that Infosys is increasingly concerned about the ramifications of the U.S. government’s ongoing investigation of alleged widespread fraud related to the illegal use of B-1 visas, and the prospect of additional grand jury subpoenas being issued, Infosys has called in the cavalry in the form of company founder and former chairman  Narayana Murthy.

Infosys announced on June 1 that its board of directors had appointed Murthy as executive chairman “in the interest of all stakeholders, particularly shareholders large and small, who have asked for strengthening of the executive leadership during this challenging time.” Murthy had stepped down from the chairmanship two years ago, when the U.S. government’s B-1 visa fraud investigation was just ramping up. As I reported at the time, Murthy was obviously troubled with the cloud that was looming over the company he had founded:

Narayana Murthy, the founder and outgoing chairman of Infosys Technologies, appears to be genuinely burdened by the ramifications of the visa fraud lawsuit brought against the company by Infosys employee and whistleblower Jay Palmer. Speaking on Saturday at his last shareholders meeting as chairman, he singled the case out as a source of sadness, and gave no indication that he believes there are no grounds for Palmer's allegations. Murthy's reference to the case was particularly noteworthy in that he was compelled to mention it in what were relatively brief remarks to a global constituency as he was ending his 30-year career at Infosys. 

This is what Murthy said:

It is not easy for me to deliver my last address at this forum. As I speak, a mosaic of images from the past whizz through my mind. As I leave the board, I feel sad that Infosys has been issued a subpoena by a grand jury in the U.S. on the B1 issue. The issue will be decided on its merits in due course.

Palmer’s retaliation and harassment case, which sparked the multi-agency visa fraud investigation, was ultimately dismissed by a federal judge who ruled that under state employment law in Alabama where the case was filed, Palmer couldn’t recover damages for retaliation. The way that law is written, the judge explained, an “employee may be demoted, denied a promotion, or otherwise adversely treated for any reason, good or bad, or even for no reason at all.” The judge did not rule that Infosys had not retaliated against Palmer, only that under Alabama law, Palmer couldn’t sue for damages.

Yet  the leadership of Infosys at the highest levels misrepresented the facts of the ruling. Infosys CEO S.D. Shibulal, reveling in what he presented as a victory for Infosys, went so far as to make this statement:

Today's decision confirms what we have been saying from the beginning, that Palmer's claims of retaliation were completely unfounded. This is a company built on core values that include leadership by example, integrity and transparency.

As I explained, the claim that the judge’s ruling confirmed that Palmer’s retaliation allegations were unfounded is entirely untrue. In any case, Shibulal was emboldened to make the comment, “We believe these [U.S. government investigations], too, are baseless.”

That remark was illustrative of the type of carelessness—some might call it “cluelessness”—that has characterized the Infosys leadership of late, and that sparked the clamor among Infosys’s shareholders that ultimately led to the dramatic step of bringing Murthy back to try to clean up the mess.

At least Murthy had had the decency and good sense, when he stepped down two years ago, to demonstrate some contrition about the B-1 allegations and to say that the B-1 issue “will be decided on its merits in due course.” Shibulal’s apparent incapacity to demonstrate that same good judgment has made him look kind of silly, especially in the wake of what Infosys was compelled to report in an SEC filing last month.

Infosys has referred to the grand jury subpoena and the U.S. government’s investigation as a matter of course in SEC filings over the past two years. But on May 13, when Infosys filed its Form 20-F, the annual report that must be filed by any foreign company that sells shares in the United States, the company broke the news to its shareholders that it had recently been advised by U.S. government authorities that the investigation was continuing, and that additional subpoenas may be issued.

Perhaps it’s just a coincidence that it was less than three weeks after that filing that Murthy was called back to Infosys for the purpose of “strengthening of the executive leadership.” In any case, the strongest leaders are those who admit their mistakes, correct them, and learn from them. If Murthy genuinely plans to exemplify that strength, his first order of business should be to reach out to Palmer, embrace him, and apologize to him for what Infosys has put him through for two-and-a-half years. Beyond simply being the right thing to do, it would help validate, in however small a measure, Shibulal’s claim that Infosys is “a company built on core values that include leadership by example, integrity and transparency.”

Infosys did not respond to a request for comment.

Add Comment      Leave a comment on this blog post
Jun 4, 2013 4:04 AM noton noton  says:
Dear Don, I cannot believe this website lets you post this drivel. Did Murthy or his spokespeople reach out to you and tell you he went back due to the alleged misuse of B1 visas and possible additional subpoenas? Or did you pull it out of your seat as usual? Consider this - the reason he went back is that they need all hands on the deck to ensure success of today's business plans as well as tomorrow's, and he's got a good chunk of the company with him still. No? Doesn't work for you? It is as expected. Grow up mate. Reply
Jun 4, 2013 7:52 AM D K Bose D K Bose  says:
Don, why you keep on writing false information and mislead a small section of readers? for those who want to know why I am saying so, refer the following snapshot from the Court's judgement in which Palmer lost his false claim against infosys: "Because this court concludes that the Alabama Supreme Court would find that the alleged conduct was not extreme or outrageous, this court need not decide Infosys’s alternative contention that there is no evidence that the threats were made by its employees. Infosys argues, and this court agrees, that Palmer is attempting to bootstrap a whistleblower retaliation claim into a negligence or wantonness tort. But there is no evidence that Alabama tort law recognizes (arguably as an exception to the State’s at-will status) an independent cause of action for negligently or wantonly failing to prevent whistleblower retaliation. As such, Palmer’s negligence-and-wantonness claim must fail under Alabama law. Palmer has failed to establish the fifth and sixth elements of his claim. He has presented no evidence that, when Infosys issued its whistleblower policy in 2003, it intended to deceive and not enforce the policy. As such, Palmer’s fraud claim Reply
Jun 4, 2013 10:39 AM Odumbo Odumbo  says:
If Murthy genuinely plans to exemplify that strength, his first order of business should be to reach out to Palmer, embrace him, and apologize to him for what Infosys has put him through for two-and-a-half years. Reply
Jun 4, 2013 8:12 PM I.T. Worker I.T. Worker  says:
Don, I really think the case has been dropped. It will be announced after the immigration reform votes in the Senate and House. Politicians don't want to announce it before immigration reform has been settled as they worry that dismissing the case now will simply sour people on immigration reform. Infosys has paid way too many bribes/campaign contributions to have any negative actions taken against them. But I'm glad you're still writing about it. Reply
Jun 5, 2013 3:59 PM curious curious  says:
Just curious, what is Palmer doing these days? or is it only you still fighting a lonely worthless battle, like a dog chasing a car. Reply
Jun 7, 2013 3:17 PM Kirtan Kirtan  says: in response to curious
Yes, it is always funny and amusing to read the low IQ articles written by Don on his self proclaimed website. Calling back Murthy has more to do with internal problems at Infosys than the B1 visa allegations but Don is as always hellbent on publishing farse. Reply
Jun 8, 2013 5:37 PM Infy Infy  says:
@curious, from what I know Jay is still happily getting paid regularly by Infy (not sure if he is doing any work to justify getting paid though).. Don't know why no other company wants to hire such a honest, extraordinarily talented induvidual.. Wondering what is making him still stick to the company that he considers so EVIL !!! Reply
Jun 11, 2013 7:20 AM PK PK  says:
I work at a fortune 50 company and they're backing away from this kind of labor. Not only due to the illegality and immorality but also because they just do bad work. Infosys IT is about as high quality as Chinese cat food or baby formula. Or lead painted plastic baby bottles. Want a project to drag on for years and never get finished? Call Infosys. And have your checkbook ready. Reply
Jun 15, 2013 11:47 PM The Dude The Dude  says:
It's interesting to see all the infosys sockpuppets attacking the author with baseless straw-man logical fallacies. It would be interesting to trace their IPs and see where they turn up. Probably at an infosys subsidiary. Reply
Aug 8, 2013 8:57 PM americanworker americanworker  says:
I am an American, working in HR at Infosys. Mr. Murthy will be in Plano TX next Wednesday for his "dog" and pony show and to take selected questions from selected people. Would love for you to show up, Don. Oh - And then two weeks later, he's ordered the slaughter/layoff of mostly American workers and they'll be notified of their "reduction in force" to move the work back to India. American workforce in the places that matter (inside - not out in the tech world) know too much and aren't scared of him. Hopefully there will be another class action suit against these miserable bastards. Murthy has no remorse about the B-1 suit. He's going to push the envelope and order the destruction of the small American workforce there is. Then the legal house will surely be busy. And the B-1 issue is only the beginning. What a bunch of arrogant idiots that run this company. Watch this thread - you'll see that what I am saying is true. It's a matter of weeks.f Reply
Sep 4, 2013 2:11 PM K. Blair K. Blair  says:
I live in Silicon Valley and have since the 1980's. What is happening here is a real shame. and a sham. There has been an acceleration of the firing of anyone with a U.S. citizenship and a wholesale broadbased replacement of citizens (of all ethnic backgrounds) with anyone (mainly from India, china and south korea) who has an H1B or "other" visa....The engineering and all other types of high tech jobs are "given" to the foreign born. Today, about 750,000 visa workers (out of about 1.5million) are holding the best jobs in Silicon Valley. Not because they are the best and brightest, but because they are the cheapest and easiest to control. Engineers who went to MIT, Harvard, Stanford U.C (everything) are fired AS A MATTER OF COURSE..once they have 10-15years of experience and replaced by younger, cheaper foreign born workers. Since there are so many from India, China and South Korea here now occupying our schools and tech companies, they naturally think they did it with their own merit. Not true. They will also be fired once they start to age. The real bad guys are the CEO's who profit the most from all this turmoil. Its hard to witness. Reply
Oct 30, 2013 12:19 AM former american infosys worket former american infosys worket  says:
NRN as he is lovingly called is a remarkable man. His belief and faith built an empire and started India's entry into IT. Although it is sad to see what leaders of Infosys made of Murthy's vision, my hope is that Infosys wakes up and realizes that in the United States, it is not a game-changer by itself, and that if its competitors agree to abide by the rule of the law, then they'll be the ones ahead. Although Infosys has strong partnerships in the US, it is a drop in the bucket and like a babe sucking on a teat. See how quickly it got yanked. Thank you, Jay Palmer. What you have done has helped to vindicate Don Tennant and his stellar coverage of this scandal. Reply

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