Infosys chief resigns after long-running feud with founders

Leigh Mccormick
August 25, 2017

Calling for more active investor engagement by the Board, the analyst said its commentary in Friday's conference call with investors was hardly decisive, reflecting Sikka's sudden exit.

The resignation follows a year-long public spat where the founders have raised a slew of concerns, right from Sikka's pay package to raising doubts over the company's Dollars 200-million Panaya acquisition.

Sources in the executive search firm industry said the specifications for Infosys' CEO have not really changed from the last time when Sikka was appointed, three years ago.

Goswami's began his letter expressing how he admired the former Infosys chairman for over two decades but he says it is now time that Murthy explain his behaviour with the company and the resignation of the chairman Vishal Sikka publicly. The organization reprimanded Mr. Murthy for Mr. Sikka's acquiescence, saying in an announcement that the founder had made "unseemly requests" and put the CEO under "persistent strike".

Amid a feud between the board of Infosys and co-founder NR Narayana Murthy, company's co-chairman Ravi Venkatesan on Tuesday called on finance and corporate affairs minister Arun Jaitley. In a short statement on Friday, Murthy had said that he would respond "in the right manner and in the right forum and at the appropriate forum".

While Pravin Rao, now chief operating officer, has been named interim CEO, Sikka will become executive vice- chairman and will be paid Dollars 1 in annual salary.

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The Infosys share price has dropped about 14.5% since Friday morning, leading to the abrupt erosion of wealth among investors, notably the founders, who together have a 12.74% stake.

The company's last CEO hunt in 2014 was a major challenge.

In his letter, Murthy also said that the company's investigation of the anonymous allegations in February was "not the way an impartial and objective investigation should be held". Much like Steve Jobs' return at Apple, Murthy rejoined Infosys as executive chairman in 2013 to steer it after disappointing earnings and loss of market share. He also said that he was disappointed by the lack of support from the people he had expected would back him.

A report in the Business Standard on Monday said LIC, a key market player, is keen on buying the stock.

The company conducted an independent valuation into the $200 million acquisition of Panaya after claims of inconsistencies in the deal. Infosys has so far refused to make public the probe report.

The Infosys board immediately refuted those allegations in a public statement, calling the letter's assertions "libelous" and "aimed at tarnishing the image of Infosys and its management".

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