Ratings plunge as Infosys links return to haunt Rishi Sunak in election year

British Prime Minister Rishi Sunak finds himself under scrutiny yet again thanks to his Indian heiress wife Akshata Murthy, daughter of IT giant Infosys’s co-founder NR Narayana Murthy.

Much to Sunak’s embarrassment, it has emerged that a trade minister in his government had told Infosys executives last year that he would “do what he could '' to help grow the company’s UK business knowing that it was owned by the prime minister’s father-in-law. In a nudge-nudge, wink-wink moment, Lord Dominic Johnson had “made it clear that he was keen to see a bigger Infosys presence in the UK and would be happy to do what he could to facilitate that”. He reportedly said this at a meeting at Infosys offices in Bengaluru on April 27, 2023.

Labour attacks

Labour, the main opposition party, is having a field day, accusing the government of granting “VIP access” to Infosys and, thereby, the prime minister’s father-in-law. “After the Tories handed billions in taxpayers’ cash to cronies for duff PPE, public will wonder why an outfit so personally close to Rishi Sunak appears to have been granted this VIP access. There are serious questions to answer,” Labour MP Jonathan Ashworth told the Sunday Mirror newspaper, which broke the story after getting details of the meeting through Freedom of Information requests.

Akshata has a 0.93 per cent stake in Infosys and her net worth is more than £690 million. In the last financial year, she received £13 million in dividends alone from the IT giant, helping to make Sunak the UK’s wealthiest prime minister ever. However, Akshata is also Sunak’s Achilles heel. This is not the first time that his wife’s business interests have embarrassed Sunak.

Akshata’s agency

In April last year, Sunak was investigated by Parliament’s sleaze watchdog over a failure to declare Akshata’s share in a childcare agency that received a financial boost in the first full-fledged budget announced by a Sunak-headed government. UK childcare company Koru Kids was one of the six childminder agencies that benefited from the incentives given by the Sunak government.

Even then, Sunak was left with an egg on his face when news of Akshata’s share in Koru Kids emerged in the media. The prime minister’s team gave a spurious defence, arguing that he could not be expected to know all the firms his wife had investments in.

Tax issues

Only last month, Akshata finally donated her share in Koru Kids to charity. That too she only took the decision after the watchdog concluded that the prime minister had inadvertently breached Parliament’s code of conduct by failing to properly declare his wife’s shareholdings.

In 2022, when Sunak was Chancellor of the Exchequer, there was public outrage when it was discovered that Akshata was still an Indian national who enjoyed non-domicile tax status in the UK and thereby did not need to pay UK taxes on her overseas income. It was then estimated that thanks to her non-domiciled status, Akshata had evaded £20 million in taxes on dividends on her shares in Infosys.

‘Blood money charges'

The revelations of his wife’s non-domiciled tax status, coming at a time when Sunak was raising taxes for ordinary British workers, made the situation very awkward for the then Chancellor. Bowing to pressure, Akshata agreed to pay UK tax on all her overseas income but not on backdated income. She also refused to give up her non-domicile status as she claimed she planned to return one day to live in India. For this reason, the British public has not really warmed to Akshata like other prime ministers’ wives as she doesn’t see the UK as home.

At the start of the Ukraine war, Sunak faced accusations that Akshata was collecting “blood money” in dividends because Infosys was still operating in Russia despite Vladimir Putin’s invasion, even as Prime Minister Sunak was urging British companies to pull out of the country. Infosys later said it was urgently closing its Moscow office.

Infosys benefits clearly

Even as the spotlight has again been turned on Sunak’s close relations with Infosys, it has been pointed out that the IT company has been favoured with public sector contracts worth more than £172million since 2015, when Sunak was first elected as Conservative party MP.

The latest disclosure that Sunak’s family could stand to benefit financially from a post-Brexit free trade agreement (FTA) that he is negotiating with India has raised major concerns of conflict of interest. Infosys has been wanting to improve access for its many thousands of contract workers through changes to the UK visa regime. According to the briefing paper for last April’s meeting, one of the objectives was to “reassure (Infosys) that the FTA will further create new opportunities and investor-friendly policies to support business growth”.

The news could not have come at a worse time for Sunak who has been repeatedly accused by the opposition of being ‘out of touch’ with the British public. With this being election year, the Conservative party has been consistently polling 20 percentage points below Labour, its main rival.

Sunak’s own image has taken a beating. While his 16-month-long premiership has been seen as weak and lacklustre, only 20 percent of the British public is satisfied with Sunak as prime minister. Compared with previous prime ministers at the beginning of a general election year, this is a very low figure. Previous prime ministers such as Gordon Brown and John Major polled much higher personal satisfaction ratings than this, before going on to lose the elections.

In the past, Sunak has been reluctant to speak publicly about Infosys and his household’s income from it, arguing that it was purely a matter for his wife alone and of no legitimate public interest. However, this argument no longer holds water as it can be seen that Infosys is being favoured over others by Sunak’s government ministers.