Law Firm Hired to As­sist Infy may Have Con­flict of In­ter­est

Tech co founder NRN Murthy on the ad­vi­sory board of Cyril Amarc­hand Man­gal­das

The Economic Times - - The Infosys Saga - Sachin.Dave@ times­group.com

Mum­bai: Cyril Amarc­hand Man­gal­das, the law firm hired by In­fosys to re­view its cor­po­rate gov­er­nance prac­tices, may have a con­flict of in­ter­est in this assignment. In­fosys founder NR Narayana Murthy, who al­leged low­er­ing of cor­po­rate gov­er­nance stan­dards at the com­pany, is on the strate­gic ad­vi­sory board of the law firm.

Ex­perts have raised con­cerns over ap­point­ing a law firm with Murthy on its board, al­though Cyril Shroff, man­ag­ing part­ner of Cyril Amarc­hand Man­gal­das, said there is no con­flict of in­ter­est.

“While one will be re­quired to look at the ex­act role of Murthy in Cyril Amarc­hand Man­gal­das, his pres­ence on the board in it­self may be a cause of con­cern. Whether this is a con­flict of in­ter­est or not is sub­jec­tive as we lack reg­u­la­tions around this,” a cor­po­rate gov­er­nance ex­pert said on the con­di­tion of anonymity.

“The role of Cyril Amarc­hand Man­gal­das is very im­por­tant in the whole process as the law firm is trusted with giv­ing a so­lu­tion to the tus­sle be­tween the founders and the board of In­fosys,” a con­sul­tant in an ad­vi­sory said. “Even if there is no con­flict of in­ter­est, can some­one al­lege that to­mor­row? The an­swer is yes.”

Cyril Amarc­hand Man­gal­das, one of the coun­try’s largest law firms, con­sti­tuted the ex­ter­nal strate­gic ad­vi­sory board in 2015 to guide the firm on strate­gic pol­icy and gov­er­nance-re­lated is­sues. Shroff, re­spond­ing to a de­tailed ques­tion­naire by ET, said there is no con­flict of in­ter­est.

“Our ex­ter­nal strate­gic ad­vi­sory board, of which Mr Murthy is an hon­orary mem­ber, guides the firm on over­all di­rec­tion and high­end strat­egy, with no ref­er­ence to any client or pro­fes­sional mat­ters. We have been ad­vi­sors to the In­fosys board for sev­eral years (long pre­ced­ing Mr Murthy’s ap­point­ment on the board) and en­joy a long-stand­ing re­la­tion­ship of trust with the com­pany and its board. The board is fully aware of Mr Murthy’s po­si­tion on the ad­vi­sory board and there is no con­flict,” said Shroff.

He added that In­fosys hired the law firm to pro­vide ex­pert pro­fes­sional ad­vice. In­fosys FILE PHOTO said on Fe­bru­ary 9 its board had re­cently ap­pointed Cyril Amarc­hand Man­gal­das, cor­po­rate gov­er­nance ex­perts, to re­ceive from the pro­mot­ers and other key stake­hold­ers var­i­ous in­puts, eval­u­ate them and make rec­om­men­da­tions.

In­fosys did not re­spond to a query sent on Fe­bru­ary 10 evening about the po­ten­tial con­flict of in­ter­est. While Murthy did not specif­i­cally re­ply to the query, he re­sponded with a “thank you” and copied it to Shroff.

The law firm’s ex­ter­nal ad­vi­sory board in­cludes Deepak Parekh, chair­man of Housing De­vel­op­ment Fi­nance Cor­po­ra­tion, Uday Ko­tak, man­ag­ing direc­tor of Ko­tak Mahin­dra Bank, Jan­me­jaya Sinha, chair­man of the Bos­ton Con­sult­ing Group (Asia Pa­cific), and Umakanth Varot­til, as­so­ci­ate pro­fes­sor in the fac­ulty of law at Na­tional Univer­sity of Sin­ga­pore.

“The board will be like a con­science keeper for the firm and they will also give us an out­side-in per­spec­tive,” Shroff told ET in an in­ter­view on Au­gust 10, 2015.

Murthy and other founders had raised con­cerns over cor­po­rate gov­er­nance prac­tices at In­fosys, es­pe­cially with re­gard to the huge sev­er­ance pays given to some depart­ing em­ploy­ees. In­fosys CEO Vishal Sikka is set to meet in­vestors on Mon­day.

In­fosys founder NR Narayana Murthy

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