Infosys exits Russia to end UK political and tax row
18 Apr 2022
Indian IT services giant Infosys has announced it will quit Russia, after finding itself at the centre of a political storm in the UK because of its business connections with Russia.
Infosys, whose founder Narayana Murthy's daughter is married to top UK politician quit Russia to ending the political and tax row involving millions of dollars.
Infosys, which has so far held off without revealing its intentions regarding Russia, on Thursday said the company will pull out of Russia.
CEO Salil Parekh. Parekh told investors during Wednesday's Q4 2022 earnings call that Infosys has around 100 employees in Russia, all working for global clients. But, he said, Infosys has no engagements with Russian entities.
Parekh said Infosys has decided to move the work performed by staff in Russia to other unspecified locations. He did not elaborate. Infosys also donated $1 million towards Ukrainian relief efforts and said it is "launching a programme to digitally re-skill up to 25,000 individuals."
That decision comes after the company's Russian entanglements became a hot topic in the United Kingdom, the residence of
Akshata Murthy, herself a successful entrepreneur and fashion designer, and daughter of N R Narayana Murthy, the founder of Infosysm is married to Rishi Sunak, the UK's chancellor of the exchequer – a cabinet post equivalent to US treasury secretary, or treasurer in other parliamentary democracies.
Akshata Murthy currently owns almost one per cent of the services giant – a stake worth around $1 billion.
The issue of Infosys's failure to join the exodus from Russia was blown up by British media, which started to ponder whether it was appropriate for the chancellor to benefit from Infosys's ongoing activities in Russia.
Spoiler alert: most thought the connection was inappropriate in a "Caesar's wife must be above suspicion" kind of way.
It developed into a scandal after it emerged that Akshata Murthy, while residing in the UK, was officially domiciled in India and therefore did not pay UK taxes on income earned in other countries.
Last week, Akshata Murthy revealed she had re-arranged her affairs to pay more tax in the UK.
However, with Infosys deciding to exit Russia, her income cannot now be linked Russia.
Infosys, meanwhile, reported strong Q4 and full-year results. Quarterly revenue was , up 18.5 per cent year on year at $4.28 billion. Full year revenue rose 20 percnt to $16.3 billion. Operating profit jumped $430 million.
With multi-year deals topping $100 million the company expects 13 to 15 per cent revenue growth for FY 22-23.