Is Narayana Murthy being blamed unfairly for Vishal Sikka’s Infosys resignation? - Hindustan Times
close_game
close_game

Is Narayana Murthy being blamed unfairly for Vishal Sikka’s Infosys resignation?

Livemint, Bengaluru | ByAnirban Sen and Varun Sood
Aug 21, 2017 10:53 AM IST

Murthy has been pressing the board to release the reports of investigations into Infosys’s Panaya acquisition and the severance package originally offered to former chief financial officer Rajiv Bansal.

On Sunday, Infosys Ltd co-founder NR Narayana Murthy turned 71, but it is unlikely to have been a happy birthday for one of the doyens of the Indian IT services business.

Infosys Ltd co-founder NR Narayana Murthy with former CEO Vishal Sikka.(PTI File Photo)
Infosys Ltd co-founder NR Narayana Murthy with former CEO Vishal Sikka.(PTI File Photo)

Murthy, three people familiar with the matter, said on the condition of anonymity, was taken aback by the tone of the board’s letter following CEO Vishal Sikka’s resignation.

Hindustan Times - your fastest source for breaking news! Read now.

The letter blamed Murthy for Sikka’s exit.

He is also upset that the three independent directors, including co-chairman Ravi Venkatesan, whom he cited in a 9 August letter as having told him that Sikka was not really CEO material (but CTO material), did not support him following the CEO’s exit, the three added.

Murthy has been pressing the board to release the reports of investigations into Infosys’s Panaya acquisition and the severance package originally offered to former chief financial officer Rajiv Bansal. Both are subject of whistleblower complaints and Infosys, after investigations by reputed law firms, has said there is no evidence of wrongdoing.

In his 9 August and 14 August emails to some of his advisers, Murthy is at pains to make the point that his primary issue is with the board and what he says as potential lapses in governance, not Vishal Sikka.

Murthy did not respond to an email questionnaire sent on Sunday. Venkatesan declined to comment for this story.

Infosys has already denied that there was any discord between the board and Sikka.

“Mr. Murthy’s continuous assault, including this latest letter, is the primary reason that the CEO, Dr. Vishal Sikka, has resigned despite strong Board support,” said Infosys in the above mentioned statement. “Co-chair of the board Ravi Venkatesan has repeatedly over the past few weeks publicly stated his and the board’s support for Dr. Sikka. The company categorically rejects any speculation or allegation of discord between the Infosys board and Dr. Sikka.”

Read more:

The three people said Murthy believes he is being unfairly blamed for Sikka’s exit, when some board members were themselves questioning Sikka’s performance as the CEO.

Earlier in April, Infosys appointed a three-member panel to “support and advise” Sikka in executing strategy, the three pointed out.

According to the people mentioned above, the scathing letter from Infosys has done lasting damage to relations between Murthy and the directors, as well as investor confidence in the company.

The relationship between Murthy and the board has hit rock bottom, they added, with no chance of reconciliation possible any time in the near term.

At least two institutional investors, who requested anonymity, said that Infosys’s board has not asked investors to mediate between the company and the founders since the start of the year.

One of the heads of the funds, which holds more than 2% shares in Infosys, told Mint that the current situation at Infosys was a result of the board being “dysfunctional” and failing to take decisive steps to remedy the situation over the past 18 months.

“There is no room left for mediation. That road is shut. This group has burnt all bridges,” said one of the people mentioned above.

To complicate things, the board’s decision to issue the scathing statement on Murthy was not unanimous, but rather a majority decision—according to the three people mentioned above.

Unlock a world of Benefits with HT! From insightful newsletters to real-time news alerts and a personalized news feed – it's all here, just a click away!- Login Now!
Stay informed on Business News along with Gold Rates Today, India News and other related updates on Hindustan Times Website and APPs
SHARE THIS ARTICLE ON
Share this article
SHARE
Story Saved
Live Score
OPEN APP
Saved Articles
Following
My Reads
Sign out
New Delhi 0C
Friday, March 29, 2024
Start 14 Days Free Trial Subscribe Now
Follow Us On