Fight Could Drag on, say An­a­lysts

Ex­perts don’t ex­pect it to leave any last­ing im­pact on the com­pany

The Economic Times - - Disruption: Startups & Tech - Jochelle.Men­donca @times­

Ben­galuru: The dust is far from set­tling on the gover­nance con­cerns at In­fosys raised by its founders, de­spite the tech­nol­ogy ser­vices firm’s at­tempts to draw a line un­der the mat­ter, say an­a­lysts. But they see the prob­lem as more of a dif­fer­ence in per­cep­tions be­tween the man­age­ment and founders, and don’t ex­pect it to leave any last­ing im­pact on the com­pany.

In an in­ter­view last week, co­founder NR Narayana Murthy said cor­po­rate gover­nance at the com­pany had weak­ened and that the out-size sev­er­ance pay handed out to its de­part­ing chief fi­nan­cial of­fi­cer could raise doubts whether that was “hush money”.

The In­fosys board held a press con­fer­ence in Mum­bai on Mon­day where it at­tempted to ad­dress the con­cerns and stated that there were “cul­tural dif­fer­ences” with the founders.

Few an­a­lysts be­lieve that the mat­ter has ended with it.

“While In­fosys’ board has tried to an­swer ques­tions, we still don’t know if the founders will be sat­is­fied. Murthy said yes­ter­day (Mon­day) that there were still con­cerns, and the press con­fer­ence didn’t say any­thing new if you look at it. I think this will drag on,” an an­a­lyst at a Mum­bai-bro­ker­age said. He

de­clined to be named.

Four out of five an­a­lysts ET spoke to said they be­lieved that the bat­tle could drag on for a few more months. But few ex­pect it to be long-term con­cern.

“Over the last week, we haven’t seen an im­pact on the stock. If the gover­nance is­sues are sim­ply a mat­ter of per­cep­tion on whether cer­tain de­ci­sions should be taken, which it seems to be, then the street won’t care. But if it be­gins to have an op­er­a­tional im­pact on the com­pany, then there will be a prob­lem,” a sec­ond an­a­lyst at an In­dian bro­ker­age said.

An­other an­a­lyst said he was less wor­ried about the founders and far more con­cerned about the state­ments be­ing made by In­fosys’ for­mer ex­ec­u­tives such as TV Mo­han­das Pai and V Balakr­ish­nan.

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