Infosys co-founder and former CEO NR Narayana Murthy has issued a statement, in which he has expressed “anguish” over the company’s statement blaming him for the resignation of Vishal Sikka.
Vishal Sikka had resigned from his position as CEO earlier in the day.
Murthy in his statement said, “I am extremely anguished by the allegations, tone and tenor of statements,” adding that he is not seeking any “money, position for children or power”.
Earlier, on Friday, the company in its statement to different stock exchanges, mentioned a purported letter written by Murthy where he alleged corporate wrongdoing over the $200 million acquisition of Israeli automation firm Panaya, as being the primary reason for Sikka’s exit, while maintaining that the former SAP man has strong support from the company’s Board.
Here is the full text of Murthy’s response:
I have read the statement issued by the Board of Directors of Infosys.
I am extremely anguished by the allegations, tone and tenor of statements. I voluntarily left the Board in 2014 and am not seeking any money, position for children or power. My concern primarily was the deteriorating standard of corporate governance which I have repeatedly brought to the notice of the Infosys board.
It is below my dignity to respond to such baseless insinuations. However, 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! They say that this is not the way an impartial and objective investigation should be held.
I will reply to these allegations in the right manner and in the right forum and at the appropriate time.
In a second letter written by Murthy, he says that he believes it’s the founders’ responsibility to ensure that governance standard is restored. The standard, he says, has fallen since September 2015 and must be brought back to reasonable level.
According to him, the company posted huge growth between 1993-2014 because of values, good governance and transparency was a competitive advantage of Infosys till 2014.
He went on to add that the best way to ensure the longevity of any corporation is by pursuing good governance and that the Board must protect the institution rather than protecting individuals.
“I just don't want the board to drive this institution to death via serious governance deficits,” he said.
Speaking of media reports over his attacks on Sikka, he said that he didn’t comment on Sikka’s work, his strategy or execution as he wasn’t on the Board.
“I simply do not believe in commenting on anybody without data and facts…My problem is with governance at Infosys…I believe that the fault lies with the current board,” he said.
Speaking of whistleblower reports, Murthy said that the Board has to answer questions on the same and that R Seshasayee ignored their suggestion to get outsiders for the whistleblower probe and then to disclose the entire report on the company’s website.
“Under what SEBI’s and SEC’s statute can board refuse info to shareholders?” he questioned.
Background
Murthy had raised objections to the $200 million acquisition of Israeli automation firm Panaya, while alleging corporate misgovernance on the part of the Sikka-led Infosys management.
Murthy, at the end of July, had demanded that the audit report of the acquisition be made public. Incidentally, Ritika Suri who led the acquisition bid, quit the company after an internal audit gave her a clean chit in July. The audit was carried out by US-based consultancy major— Gibson, Dunn & Crutcher. The audit report concluded that no kickbacks or conflicts of interest were apparent.
Allegations of wrongdoing first came to light in February, when two anonymous letters alleged irregularities in the merger deal.
Incidentally, Suri was inducted into Infosys by Sikka from SAP in 2014.
Other than the two anonymous letters, investment research firm Ambit Capital had also questioned Suri’s resignation and downgraded Infosys to “Under review” from “Buy” after these allegations cropped up.
Though Sikka did not take any name in his letter to the company’s employees, he blamed “continuous assault and misguided campaign” against him as the reason for his exit.
The differences between Murthy and Sikka first came to the fore in January, with the latter expressing his displeasure at the increase in Sikka’s compensation from $7.08 million to $11 million, saying that it was done in a ‘non-transparent’ manner.