LIC Con­cerned, Open to Rais­ing ‘Rel­e­vant Is­sues’ with Board

The Economic Times - - The Infosys Saga - Dheeraj.Ti­wari @times­group.com

New Delhi: Life Insurance Cor­po­ra­tion, the sec­ond-largest stake­holder in soft­ware ma­jor In­fosys, seems open to rais­ing “rel­e­vant is­sues” with the ex­ist­ing board in the event of a show­down be­tween the man­age­ment and the found­ing part­ners of the IT firm.

“We are con­cerned about what is hap­pen­ing in the com­pany. The pro­mot­ers have not ap­proached us so far. If they do, we will as­sess the sit­u­a­tion and take up rel­e­vant is­sues with the ex­ist­ing board,” a se­nior LIC of­fi­cial said, adding the in­sur­ers’ main con­cern is the pub­lic in­vest­ment in the firm.

Ac­cord­ing to in­dus­try ob­servers, a more sym­pa­thetic LIC can ex­ert more pres­sure on the ex­ist­ing In­fosys board by mak­ing the mem­bers heed to the sug­ges­tions made by the pro­mot­ers, which may also in­clude bring­ing in new peo­ple in the top man­age­ment.

The back­ing of the coun­try's largest do­mes­tic in­vestor, it is felt in in­dus­try cir­cles, would bring bal­ance to the on­go­ing tus­sle when other in­vestors such as Op­pen­heimerFunds have sup­ported the ex­ist­ing man­age­ment. Ex­ist­ing in­vestors feel the founders need to ac­cept that the IT firm was pub­licly listed and no longer “their (pro­mot­ers')” com­pany. Op­pen­heimerFunds holds about 2.7% stake in the com­pany, while the pro­moter and pro­moter group hold­ing in the firm is at 12.75%.

On Satur­day, LIC in­formed the stock ex­changes it has ac­quired an ad­di­tional 2% stake in In­fosys over three years end­ing Fe­bru­ary, tak­ing its to­tal share­hold­ing in the firm to 7.02%. “We are will­ing to hear out every­one, but please ap­pre­ci­ate there is sub­stan­tial pub­lic money in­vested,” the LIC of­fi­cial said, in­di­cat­ing this time LIC may not re­main in­dif­fer­ent as it did dur­ing the tus­sle be­tween Ratan Tata and Cyrus Mistry. “Our pri­mary aim is to pro­tect our in­vest­ments and, as a govern­ment-owned firm, we also have a larger role,” the of­fi­cial said.

In­fosys founder NR Narayana Murthy had, in an in­ter­view with ET, be­moaned what he de­scribed as a “con­cern­ing drop” in cor­po­rate gov­er­nance at the com­pany. There are re­ports that other co­founders Nan­dan Nilekani and S Gopalakr­ish­nan have also raised con­cerns on cor­po­rate gov­er­nance. How­ever, the In­fosys board is seen fully sup­port­ive of the ex­ist­ing man­age­ment. Ki­ran Mazum­dar-Shaw, an in­de­pen­dent direc­tor on board, who is also the founder of biotech­nol­ogy ma­jor Bio­con, had said that, “Just be­cause a sug­ges­tion comes from the pro­moter group, there is no obli­ga­tion for us to do things that way… We are not go­ing to sim­ply do things be­cause they (pro­mot­ers) are ask­ing us.”

She had fur­ther noted that the board would se­ri­ously con­sider sug­ges­tions that were “right for the or­gan­i­sa­tion.”

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