HEADLINES:
September 24 2017
Narayana Murthy ‘anguished’ by Infosys Board blaming him for Sikka’s exit
18 August 2017

(It is) below my dignity to respond to baseless insinuations,” Mr. Murthy says.

Co-founder of Infosys N.R. Narayana Muthy on Friday said that he was “anguished by allegations, tone and tenor of statements made by Infosys Board.”

The Board, in a scathing attack, blamed Mr. Murthy’s “continuous assault” as the primary reason for CEO Vishal Sikka quitting the company and ruled out a formal role for the co-founder in the company’s governance.

“(It is) below my dignity to respond to baseless insinuations,” Mr. Murthy said. He also added that he would take action at an “appropriate time”. “Will reply to allegations in right manner, right forum and at an appropriate time. Some shareholders have said it’s hard to believe a report by a set of lawyers hired by a set of accused, giving clean chit to the accused,” Mr. Murthy said.

 

Defending Sikka’s performance

In a strongly worded statement, the country’s second largest software services firm defended Mr. Sikka’s performance saying, under him, Infosys had delivered profitable revenue growth.

The Board alleged that a letter authored by Mr. Murthy “has been released to various media houses attacking the integrity of the Board and management alleging falling corporate governance standards in the company”.

“Murthy’s letter contains factual inaccuracies, already-disproved rumours, and statements extracted out of context from his conversations with Board members,” it said.

 

The Board said Mr. Murthy had repeatedly made “inappropriate” demands, which are inconsistent with his stated desire for stronger governance and argued that Mr. Murthy’s “campaign” had intensified over time.

“Over time the demands have intensified, which, when declined by the Board, resulted in the threats of media attacks being carried out,” it said.

Feasible solutions

The Board rued that its efforts to resolve the concerns of the founders — who together own about 12.75% stake in Infosys — over the course of a year through a dialogue have not been successful.

The statement also added that the Board had tried earnestly to find “feasible solutions within the boundaries of law and without compromising its independence”. In addition, it cautioned that Mr. Murthy’s actions and demands were damaging the company.

The Board sought to assure shareholders, employees and customers that it “will not be distracted by this misguided campaign” by Mr. Murthy and that it would continue to adhere to the highest international standards of corporate governance.

During an investor call, Mr. Sikka said the “continued drumbeat” about former CFO Rajiv Bansal’s severance package and Panaya deal in the last 4-5 quarters have been “sickening”.

Infosys co-chairman Ravi Venkatesan said the management is highly distressed by the continuing allegations against Mr. Sikka and Board members.

 

 

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