Doomsday For Infosys?
“In God we trust, everybody else bring data to the table.”
– Narayana Murthy
Infosys, the company renowned for good corporate governance and strategic management; the company that ranked number one (Poll, Asia Poll, 2016) on the poll which ranked companies on parameters such as disclosure and transparency, responsibilities of management and the board of directors and shareholders’ rights and equitable treatment, is now facing heated questions on its integrity.
Many questions are yet to be answered satisfactorily, Vishal Sikka’s huge hike, details about Panaya Deal; the Israeli software company Infosys acquired in 2015, disclosure of investigation reports, questions on efficiency and internal management, all have shaken the trust of its investors and clients. The impact can be easily seen, its equity sank by 10% in India, taking away a whopping 30,000 crores from the market value of Infosys. Its ADR sank by 7.16% on Nasdaq on Friday, 18th August 2017, the day when Vishal Sikka, the CEO of Infosys resigned hitting an all-time low where the stake holders observed the immediate trickle down after the CEO’s official resignation. Sikka had earlier set a financial target of $20 billion by 2020 for the company as per his vision given the current revenue gains from Infosys. His resignation isn’t just a sign of his dissatisfaction at work but also Murthy’s concern for the company.
People, however had different views –
“Yes, true. He (Sikka) wanted to leave from February by his own admission. He is covering up his own failure to reach the target by blaming Narayana Murthy,”
-Mohandas Pai, former Infosys CFO
“Mr. Murthy’s continuous assault, including the latest letter, is the primary reason that the CEO, Dr. Vishal Sikka, has resigned despite strong Board support”
– BOD, Infosys
Murthy has long been insisting on removing bad apples out of the system without getting the business hurt. Murthy’s primary concern is good corporate governance. His role as a co-founder of Infosys has been groundbreaking. He made Infosys brick by brick and has been associated with the company for over three decades; giving a significant tenure of his life in order to build the goodwill of Infosys. Murthy, along with his family; own just 3.44 per cent stake in Infosys but his letters have made a strong impact on the investors, clients and other stake holders of the company. Ex board member Omkar Goswami publicly wrote a letter on 22nd August blaming Narayana Murthy as the culprit of most of the mishap taking place in Infosys. The entire board of directors have opposed the views of Murthy and have accused him of spreading grapevine within the corporation. Murthy replied saying that the statements made against him were baseless and he would be giving his justifications on the proper forum on the right time. His speech to investors was supposed to be delivered on 23rd of August, however it was postponed to next week as he was taken unwell.