In­fosys Chair­man, CEO Play Down Dis­putes, De­fend Gov­er­nance Pol­icy

No bat­tle be­tween board mem­bers and founders, they say

The Economic Times - - Disruption: Startups & Tech - Our Bu­reaus

New Delhi | Ben­galuru | Mum­bai: In­fosys board chair­man R Se­shasayee and chief ex­ec­u­tive Vishal Sikka on Mon­day said the on­go­ing cor­po­rate gov­er­nance dis­pute be­tween founders and board mem­bers of the IT firm was “not a bat­tle” even as they went about ex­plain­ing the com­pany’s stand on var­i­ous is­sues to top in­vestors and the pub­lic.

Sikka said he shares a “heart­felt” and “warm” re­la­tion­ship with In­fosys co­founder Narayana Murthy — who trig­gered the cur­rent stand­off by ques­tion­ing cor­po­rate gov­er­nance at the firm in an ex­plo­sive in­ter­view to ET last week — at a press meet in Mum­bai on Mon­day. “I deeply value Narayana Murthy’s sug­ges­tions, in­clud­ing the crit­i­cism,” he said.

He had said sim­i­lar things ear­lier in the day dur­ing his key­note ad­dress at an in­vestor con­fer­ence where he also held meet­ings with about ten in­ter­na­tional fund man­agers.

Speak­ing at the press con­fer­ence, Se­shasayee said the com­pany fol­lows good cor­po­rate gov­er­nance prac­tices, in­clud­ing hold­ing an in­quiry into a whistle­blower com­plaint and ex­plained the prac­tices fol­lowed to de­cide Sikka’s pack­age, which has been a bone of con­tention with the founders.

He de­fended ap­point­ments of dif­fer­ent board mem­bers in­clud­ing that of Pu­nita Ku­mar Sinha, wife of min­is­ter of state for civil avi­a­tion Jayant Sinha, as in­de­pen­dent direc­tor. “We are very proud to have Pu­nita Sinha on our board, a wo­man should not be judged based on the pro­fes­sion of her spouse,” Se­shasayee said. He also pointed out that a new sev­er­ance pack­age plan has been put in place to en­sure there are “no more Ra­jiv Bansals”. “Call­ing it hush money is deeply dis­turb­ing,” he added. The Ben­galuru-head­quar­tered com­pany is in the mid­dle of a fire­fight be­tween the founders and the ex­ist­ing board mem­bers about lapses in cor­po­rate gov­er­nance. Murthy in his in­ter­view to ET had ques­tioned the ₹ 17.38 crore sev­er­ance pay­out made to for­mer chief fi­nan­cial of­fi­cer Ra­jiv Bansal, say­ing “such pay­ments raise doubts PHOTOS: NITIN SONAWANE whether the com­pany is us­ing such pay­ments as hush money to hide some­thing”.

Se­shasayee de­nied the charges. “It is un­true that we don’t en­gage with the founders,” he said. ET on Mon­day re­ported that at the heart of the on­go­ing bat­tle is a $200-mil­lion ac­qui­si­tion of Is­raeli soft­ware com­pany Panaya by In­fosys in Fe­bru­ary 2015, and that Bansal had ques­tioned the va­lid­ity of the deal be­fore re­sign­ing.

Sikka said the com­pany “fol­lowed the com­plete process on Panaya ac­qui­si­tion”. For­mer CFO Bansal did the ac­counts for the deal, cer­ti­fied it, and there was no ques­tion of skip­ping process, he said.

At the in­vestor con­fer­ence ear­lier in the day, Sikka and four other se­nior ex­ec­u­tives went into a sep­a­rate meet­ing room with about ten in­ter­na­tional fund man­agers. For­eign port­fo­lio in­vestors own over 39% of In­fosys.


The GIC, for­merly known as the Govern­ment of Sin­ga­pore In­vest­ment Cor­po­ra­tion, was one of the funds in the room, which is also one of In­fosys’ top five in­sti­tu­tional in­vestors. Op­pen­heimerFunds, an­other large in­sti­tu­tional in­vestor, has al­ready come out and pub­licly backed the man­age­ment, say­ing the board should ‘con­tain in­ter­ven­tions from non-ex­ec­u­tive pro­mot­ers’.

Sikka met the do­mes­tic fund man­agers in a sep­a­rate meet­ing. “I have a heart­felt and warm re­la­tion­ship with Narayana Murthy. I have not met Nan­dan in over a year but I met Kris (Gopalakr­ish­nan) on a Lufthansa flight. I have an amaz­ing re­la­tion­ship with the founders,” Sikka said in his key­note ad­dress. He dis­missed me­dia re­ports of gov­er­nance is­sues as dis­trac­tions.

Sikka also made a case for growth dur­ing his ten­ure and the steps he had taken to help In­fosys beat an in­dus­try con­trac­tion caused by au­toma­tion. Murthy and other founders had also ques­tioned Sikka’s high com­pen­sa­tion has also been a topic of de­bate, but have re­it­er­ated their faith in CEO.

R Se­shasayee (left) and VIshal Sikka at the press meet in Mum­bai

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