Infosys Chairman, CEO Play Down Disputes, Defend Governance Policy
No battle between board members and founders, they say
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