Narayana Murthy denies that any such plans are in the pipeline.

Infosys stock down 3 over report on founders sell-off Sikka vehemently denies rumours
Atom IT Friday, June 09, 2017 - 10:07

Infosys CEO, Vishal Sikka has denied reports that co-founders of Infosys are exploring a sale of their 12.5% stake in the company worth about Rs 28,000 crore. After the Times of India reported about the prospective sale, Infosys stock saw a dip of 3% at opening today.

However, Infosys co-founder Narayana Murthy has denied any such plans, when contacted by the Times of India. "It is not true at all," Murthy told TOI. 

In a response to ET NOW , Sikka said that while he fully trusts any decision they take, the fact that Narayana Murthy has denied any sale means the media shouldn’t fan these rumours. 

The move has reportedly been triggered by the promoters' unhappiness over the manner in which the company has been run since their exit three years ago. An instead of confronting the company’s board, it seems the promoters have decided to break off entirely from the company, according to The Times of India. 

Murthy, Nandan Nilekani, Kris Gopalakrishnan, SD Shibulal and K Dinesh founded Infosys in 1981 and took the company public in 1993.

In February this year, there was a public spat between CEO Vishal Sikka and co-founders when Murthy raised serious concerns over corporate governance and the changing cultural ethos of the company. The bigger issue bothering him however, seemed to the high compensation packages drawn by Sikka and other senior Infosys executives, the outsized severance package offered to former CFO Rajiv Bansal, and by acquisition strategies of Infosys, TOI reported. 

When contacted by TOI, Narayana Murthy denied there was any move to sell the promoter holding in the company. "It is not true at all," he told TOI.

Vishal Sikka, in his statement to ET Now also denied stake sale plans of the company’s co-founders. 

“I was hired by Mr Murthy and came to Infosys because of him, and I fully trust any decision they make, as one of high integrity and driven by a deep sense of purpose and values,” he said.

Infosys too, released a statement on Friday saying, "Infosys would like clarify reports in the media speculating on plans of stake sale by the promoters. This speculation has already been categorically denied by the promoters. The company further reiterates that it has no information on any such development. We would like to appeal to the media not to fuel such speculative stories as they are likely to harm the interests of the company and all its stakeholders."

Murthy and his family are the largest shareholders among promoters with a stake of 3.44%. Nandan Nilekani, who took over the reins of the company from Murthy—before going on to launch Aadhaar— told TOI, "I do not comment on Infosys," and refused to take any more questions on the issue.

Incidentally, earlier this week, there were reports of promoters of another IT major Wipro evaluating the sale of the company or some of its units and approached investment banks to arrive at a fair value. Wipro has however, denied the news.

The IT industry has been going through an extremely rough patch ever since Donald Trump took over as the President of the United States. With his focus on local job creation, the Indian IT Industry has been in the doldrums.

There have also been massive layoffs across the IT industry by big players like Infosys, Cognizant and Wipro.

There have been speculations that these measures are being taken after H-1B Visa rules were being tightened in the US, due to which these IT firms are having to hire more locals in the US.

Automation in the IT industry is being seen as another major reason. With all IT majors going  digital, lower-end jobs are increasingly becoming redundant.

Image: Vimeo

Show us some love and support our journalism by becoming a TNM Member - Click here.