US law firm clears Sikka over Panaya deal

An independent probe had cleared Infosys Chief Executive Officer Vishal Sikka over allegations of personal gains made during the acquisition of Israeli software firm Panaya, the company said on Friday.

The details of the investigation by US law firm Gibson Dunn & Crutcher were released by Infosys on the eve of its annual general meeting on Saturday.

The clean chit will deflect any criticism against Sikka, except for the ambitious target he had set when he joined Infosys in August 2014. The growing rift between the Infosys management and its founders led by NR Narayana Murthy is likely to come up for discussion at the AGM. The other issue shareholders may raise is the watering down of the revenue target—$20 billion by 2020—set by Sikka when he took over as Infosys CEO three years ago.

In February, an anonymous employee had written to the Infosys board, its founders, and stock market regulators in India and the US, alleging wrongdoing by Sikka in the $200 million acquisition of Panaya.

The mail accused Sikka of using Infosys resources for personal reasons.

It also said differences over the Panaya deal led to the exit of former chief financial officer Rajiv Bansal, who was offered a severance package of more than ~17 crore. Murthy had objected to the severance package, accusing the Infosys board of diluting disclosure norms.

Since then, Murthy and his aides, former directors TV Mohandas Pai and V Balakrishnan, have sought an investigation into Bansal’s severance package. In February this year, an anonymous letter claimed anomalies in the acquisition of Israeli software firm Panaya, which Infosys bought for nearly $200 mn in 2015 According to the letter, a dispute over Panaya's valuation led to the exit of Infosys CFO Rajiv Bansal Infosys valued Panaya 25% higher against a value of $162 million by some investors, it said The complainant had sent e-mails to Infosys board and founders, US SEC, and Sebi