Image: Selvaprakash Lakshmanan for Forbes India
Infosys, India’s second-biggest software services company, will provide the newly appointed non-executive chairman
Nandan Nilekani a “full briefing” on the investigations into allegations made by a whistleblower which became central to founder NR Narayana Murthy’s fight with the company over governance lapses.The fight, which became increasingly public and bitter
, precipitated the resignation of then CEO Vishal Sikka on Aug. 18
over what he called personal attacks by Murthy. The complaints related to alleged overvaluation of Panaya Inc., which Infosys acquired for $200 million in 2015, and to large severance payouts to former CFO Rajiv Bansal and former general counsel David Kennedy.
Nilekani declined to say if he would now make public, the full reports of the independent investigators, as demanded by Murthy. The investigations into the February 2017 allegations by the whistleblower cleared Sikka of any wrongdoing, Infosys said in a statement in June.
“I’m here because there was no one else, that’s a joke, but it’s also a fact,” Nilekani told reporters in Bengaluru on Friday, a holiday on which markets were closed. Levity apart, he reiterated that he was here “representing everybody” including “100 percent” of shareholders
Nilekani added: “I will be reviewing these investigations, and at that time the board will decide what is to be done. I will decide in an open, fair and unbiased manner, the appropriate course of action.”
He said his taking over as chairman has broad support, including 12 of the largest mutual funds in the country. That said, he has an uphill task ahead to restore the damage done to Infosys’s credibility, and to push ahead quickly with finding a new CEO so the company can focus on its business operations.
“Nilekani does not have a magic wand and his toughest task will be to propel Infosys towards a high-growth path,” V K Sharma, head (private client group) and capital markets at HDFC Securities told Forbes India. “He comes back at a far more challenging time when technological changes are constant.”
That he appears to have the backing of promoters, and institutional investors — along with a free hand to build a new board — could make the road smoother for him, but “he needs to handle the Panaya acquisition probe issue carefully otherwise it could backfire,” Sharma said.
“With all the changes having taken place, we can now expect a cessation of hostilities between the founders and the board.” says Ajay Bodke: CEO and chief portfolio manager at Mumbai-based brokerage Prabhudas Lilladher Pvt Ltd.
Bodke suggests that the stock market may heave a temporary sigh of relief in the coming days (with Nilekani coming back), but “the grave damage done to the Infosys brand can only be restored if the company introspects the harmful practices which had lowered its esteem amongst various stakeholders.”The board has also approved the appointment of the executive recruitment firm Egon Zehnder to work with its Nominations and Remunerations Committee to review and identify the right candidate to be the company’s next CEO and MD, Infosys said in a statement on Friday.ALSO READ:
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