We consider Narayana Murthy a well wisher, not shareholder activist: Infosys
Bengaluru: Infosys co-chairman Ravi Venkatesan on Wednesday said the company certainly would not want to label co-founder and promoter N.R. Narayana Murthy as a shareholder activist, but consider him a “well-wisher”.
“I would like to see him—Murthy—as a well-wisher of Infosys, which he has been and will continue to be so.. I don’t think we should label him as A or B, and certainly not as a shareholder activist,” he told PTI in an interview here.
Venkatesan was responding to a query whether the company would prefer to see Murthy, who has been flagging falling corporate governance standards, as shareholder activist or a well-wisher. Venkatesan said he regards Murthy not only as the founder, but a mentor, and hoped that the relationship with him continues in a constructive and productive way for a long term.
“For most people whether they are employees or large number of investors, he will continue to be the founder, and certainly I regard him not only as a founder, but as a mentor. So, hope this relationship continues in a constructive and productive way for a long-term,” he said.
Infosys had flagged actions by “activist shareholders” as a risk factor, which could potentially require the company to incur significant legal fees and public relations costs. In its annual filing to the US Securities and Exchange Commission, Infosys said such activities could interfere with the company’s ability to execute its strategic plan.
Over the past few months, the country’s second largest software services firm has been battling allegations by Murthy and other former senior executives of falling corporate governance standards. Asked who are the shareholder activists the company is wary about, Venkatesan said, “I think that is the question for CFO Ranga (Ranganath D. Mavinakere).” He however said the company’s risks are not related to a single event, which unfortunately the media picked up, but to 55 risks including cyber security risk.
“We called out 55 risks.. We have clarified, both the company and I, that we didn’t intend to call out any individual (Murthy) or group in particular, but as a generic risk,” he added. Asked if the company really wants to lose founders, especially Murthy at the trying times of new digital era by selling off their entire stake, Venkatesan said instead of deliberating much on the issue, the real issue for the company and CEO Vishal Sikka is how best they can perform and hope to keep their stakeholders and founders, including Murthy, invested in Infosys.
“As a company we can’t comment on the intentions of the founders, but I hope if Infosys and the shares perform, then not only the founders, but all shareholders will continue to stay invested in the company,” he said. Venkatesan was replying to a query on media speculation on founders including Murthy selling off their entire stake.
“This thing (speculation over founders selling entire stake)is actually incidental.. I think the real issue for Vishal; for Infosys; for the board, and all of us is about only one thing, it is about performance. What matters right now is that Infy should be at the leading edge of change and our performance must be the best in the industry, and if we do that I am hopeful that all investors will continue to stay invested in us. That is the real issue,” he reiterated.
Venkatesan also said IT industry is changing dramatically and is not normal, and if the company does not change, it is going to be difficult days ahead (for Infosys). In spite of the “bad press” on various issues including severance package given to former CFO Rajiv Bansal and allegations over Panaya acquisition, the company’s performance has been right at the top of the list.
“Inspite of all things (Bansal and Panaya issues) happening, from a performance standpoint, we were right at the top of the list. If you look at Q1, you saw some other companies had a lot of challenges, but our performance was quite solid,” he said. Venkatesan further said the company should accelerate because half of its growth has come from new and future services like digital, cyber security, IoT and AI.
“Also, last year, which was year ended 31 March, Infy’s growth rate was the second highest in the industry. We did the best job of maintaining margins. Our free cash flow generation was the best in the industry,” he added. Murthy and other founders have been vocal about Bansal and Panaya issues. PTI