SIKKA QUITS INFOSYS

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 today. Sikka, 50, a former German IT major SAP executive under whose three year tenure Infosys' revenue rose by about 25 per cent, did not himself name Murthy directly as the reason for his exit but said he faced "false, baseless, malicious and increasingly personal attacks". Murthy said he was anguished by the allegations, tone and tenor of statements made by the Infosys board and it is "below my dignity to respond to baseless insinuations". He said he will reply to the board's allegations in the right manner, right forum and at an appropriate time. 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. The latest provocation seems to be Murthy claiming in an email, which found its way to the media, that he had been told by Infosys independent directors that Sikka was more suited as a Chief Technology Officer than Chief Executive Officer. 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 integrity of Board and management alleging falling corporate governance standards in the company". "Mr 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 tomorrow 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. The statement added that the Board had tried earnestly to find "feasible solutions within the boundaries of law and without compromising its independence". It also cautioned that Murthy's actions and demands are damaging the company. The Board sought to assure shareholders, employees and customers that it "will not to be distracted by this misguided campaign" by Murthy and will continue to adhere to the highest international standards of corporate governance. During an investor call, 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 Sikka and Board members. Sikka said that addressing this "noise" has consumed hundreds of hours of his time in recent times and therefore, he came to the decision to quit. The Infosys board said it is "profoundly distressed" by the unfounded personal attacks on the members of the management team. "The board denounces the critics who have amplified and sought to further promote demonstrably false allegations, which have harmed employee morale and contributed to the loss of the company's valued CEO," Infosys said in a statement.

Can't do my job while constantly defending attacks: Sikka

Vishal Sikka today said he took the decision to quit as the CEO of Infosys as it was difficult to carry out his job while constantly defending against unrelenting, malicious and increasingly personal attacks. Sikka has been in the midst of a public tussle between the management and founders with the latter making allegations of lapses in corporate governance. "I cannot carry out my job as CEO and continue to create value, while also constantly defending against unrelenting, baseless/malicious and increasingly personal attacks," he said in an email to employees. Sikka added that after much contemplation, he has decided to leave "because the distractions, the very public noise around us, have created an untenable atmosphere". Co-founder NR Narayana Murthy and others had questioned the high compensation paid to Sikka as also severance package to certain former executives. Also, an anonymous letter was sent to 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 exonerated the board of any wrong doing, Murthy kept the pressure on, seeking making public the full contents of the investigation report. Stating that the decision had weighed on him as he wrestled the pros and cons, Sikka said he was clear in his decision. He stressed that life is too short to "engage in battles of opinions in the public" that takes critical time and focus away from the business and adds to the eardrum buzz. "I was, and remain, passionate about the massive transformation opportunity for this company and industry, but we all need to allow the company to move beyond the noise and distractions," he noted. Sikka said he needs to move forward and return to environment of respect, trust and empowerment, where he can take on new "lofty challenges". On whether he had any regrets during his three-year association with Infosys, Sikka said the answer is a "clear no, not for a second". "However difficult the noise of the last several months has been, I wouldn't trade our time together for anything," he said.

No change in buyback plans, says Infosys

Infosys today said there is no change in its buyback plans, under which it could return as much as Rs 13,000 crore to its shareholders. The board of the embattled company - which saw its CEO Vishal Sikka step down today amid founders alleging corporate governance lapses - is scheduled to meet tomorrow to consider the buyback proposal. "There is no change in buyback plans. We have made a commitment on how much and when to return cash to shareholders," Infosys board Chairman R Seshasayee said at a conference. The share buyback -- which will be the first in the company's 36-year history -- has been a long-standing demand by some of the founders and high-profile former executives, who have been pushing Infosys to return surplus capital to its shareholders. "None of the things that have been set in motion... will be stopped," Seshasayee said responding to a specific question on the fate of the buyback amid the high-profile departure of the CEO. There are concerns that the investors sentiments could take a beating following the ugly and public spat between the founders and the management of India's second largest software exporter. The Infosys stocks plunged 9.56 per cent to close at Rs 923.50 a share. The Bengaluru-based company in April had announced that it will pay up to Rs 13,000 crore to shareholders during the current financial year through dividend and/or share buyback. The company has not yet outlined the details of the proposed share buyback. Share buybacks typically improve earnings per share and return surplus cash to shareholders, while also supporting share price during period of sluggish market condition. Infosys had cash and cash equivalents worth over USD 3.5 billion on its books as of June 30, 2017. A number of tech companies have announced share buyback programmes this year to offer rich returns to shareholders. While Infosys' larger rival TCS offered Rs 16,000-crore mega buyback offer to shareholders, rivals like Cognizant, Wipro, HCL Technologies and Mindtree have also made similar announcements.

Board blames Murthy's continuous assault for Sikka's exit

In a scathing attack on N R Narayana Murthy, Infosys Board today blamed his "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. There were no immediate comments from Murthy on the allegations. In a strongly worded statement, the country's second largest software services firm defended Sikka's performance saying under him, Infosys has delivered profitable revenue growth. The Board alleged that a letter authored by 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 Murthy has repeatedly made "inappropriate" demands, which are inconsistent with his stated desire for stronger governance. The Board argued that Murthy's "campaign" has 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. The Board rued that its efforts to resolve the concerns of the founders - who together own about 12.75 per cent stake in Infosys - over the course of a year through a dialogue have not been successful. The statement added that the Board had tried earnestly to find "feasible solutions within the boundaries of law and without compromising its independence". It also cautioned that Murthy's actions and demands are damaging the company. The Board sought to assure shareholders, employees and customers that it "will not be distracted by this misguided campaign" by Murthy and will continue to adhere to the highest international standards of corporate governance. During an investor call, 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 Sikka and Board members.

Upset by Infy board's charges, will respond at right time: NRN

Infosys co-founder NR Narayana Murthy today said he is not seeking "any money, position for children, or power", while expressing anguish over the board's allegations that his "continuous assault" led to Vishal Sikka quitting as CEO. Murthy, who has been in a long-running battle with the board and top management of the company he founded with six others over three decades ago, said his concern primarily was the "deteriorating standard" of corporate governance at Infosys. He also questioned the investigations that cleared the technology major of all charges of mismanagement. In a surprise announcement, Infosys today said Sikka has quit as CEO after nearly three years on the post. It issued a strongly-worded statement earlier in the day blaming Murthy's "continuous assault" as the primary reason for Sikka's quitting. The company's board alleged that Murthy has repeatedly made "inappropriate" demands, which are inconsistent with his stated desire for stronger governance and that his "campaign" has intensified over time. "I am extremely anguished by the allegations, tone and tenor of the statements... I will reply to these allegations in the right manner and in the right forum and at the appropriate time," Murthy said in an emailed statement. Murthy said several shareholders, who have read the whistle-blower report, had told him that an "impartial and objective investigation" is not held in the manner in which Infosys' probe happened. "...several shareholders who have read the whistle-blower report have told me that it is hard to believe a report produced by a set of lawyers hired by a set of accused, giving a clean chit to the accused and the accused refusing to disclose why they got a clean chit!" Murthy quipped. He further said: "They say that this is not the way an impartial and objective investigation should be held". Infosys Chairman R Seshasayee responded to Murthy's allegations saying the suggestion that renowned law and audit firms will connive with the Board and overlook 'misdeeds' of the CEO and post a clean report, is "completely untenable". Seshasayee and co-chairman Ravi Venkatesan, however, ruled out any legal action against Murthy.