Sikka quits as Infosys CEO

Source: The Hitavada      Date: 19 Aug 2017 08:30:42


 

NEW DELHI,

Infosys Board blames Murthy’s continuous assault for Sikka’s exit

Pravin Rao, currently Chief Operating Officer, has been named interim CEO

“Over the last many months and quarters, we have all been besieged by false, baseless, malicious and increasingly personal attacks,” Sikka wrote in his resignation letter

Shares of Infosys ended sharply lower by nearly 10 per cent after Sikka’s resignation

VISHAL Sikka, the first non- founder CEO of Infosys Ltd, has abruptly resigned due to the “continuous assault” and “campaign” by founder and ex-chairman NR Narayana Murthy, the USD 10 billion firm said. Sikka, 50, a former German IT major SAP executive under whose three year tenure Infosys’ revenue rose by about 25 pc, did not himself name Murthy directly as the reason for his exit but said he faced “false, baseless, malicious and increasingly personal attacks”.

The resignation follows a year-long acrimony between the board the high-profile founders led by Murthy, who raised issues of “poor corporate governance” and executive pay as well as doubts over acquisitions. Founders still hold 12.75 per cent in Infosys.
While Pravin Rao, currently Chief Operating Officer, has been named interim CEO, Sikka will become executive vice- chairman for USD 1 annual salary to help find new MD and CEO latest by March 31, 2018.


Infosys Board came out with a strongly worded statement defending Sikka’s performance and ruled out a formal role for any of co-founders in the company’s governance.
The company board alleged that a letter authored by Murthy “has been released to various media houses attacking the ended sharply lower by nearly 10 per cent after Sikka’s resignation integrity of 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 Murthy has repeatedly made “inappropriate” demands, which is inconsistent with his stated desire for stronger governance. The Board, which is to meet on Saturday to consider a Rs 13,000 crore share buyback - a key demand of the founders for putting cash with the company to use - argued that Murthy’s “campaign” has intensified over time.

Shares of Infosys, which like other IT companies are battling a slowdown in new deals from western clients and visa curbs in the US, fell about 12 per cent before recovering a bit. They were trading at Rs 919.70 at 1440 hours, down 9.93 per cent over the previous day’s close.


Without naming anyone, Sikka in his resignation letter to the Board said that “over the last many months and quarters, we have all been besieged by false, baseless, malicious and increasingly personal attacks” and these allegations have been repeatedly proven false by multiple independent investigations.


“But despite this, the attacks continue, and worse still, amplified by the very people from whom we all expected the most steadfast support in this great transformation,” he said.


Once a poster boy of Indian IT success story, Infosys has been battered by intense acrimony, with founders led by Murthy questioning the high compensation paid to Sikka as also severance package to certain former executives. Besides, an anonymous letter was sent to the Securities and Exchange Board of India and the US Securities and Exchange Commission earlier this year, alleging that the Israel-based Panaya acquisition was overvalued and that some Infosys executives may have benefited from the deal.
While an independent probe absolved the board of any wrong doing, Murthy kept the pressure on making the full contents of the investigation report public.


“Over time the demands have intensified, which when declined by the Board resulted in the threats of media attacks being carried out,” said the statement issued by the Board. Infosys had refused to make public the probe report. The Board rued that its efforts to resolve the concerns of the founders over the course of a year through a dialogue has not been successful.