Infosys’s Ritika Suri, who led Panaya acquisition, has resigned
Bengaluru: The executive who heads the large deals team at Infosys Ltd, and was previously in charge of mergers and acquisitions (M&As), has resigned, dealing a blow to chief executive Vishal Sikka who has struggled to retain top leaders at India’s second largest software services company since he took over three years ago.
Palo Alto, California-based Ritika Suri—who led the contentious acquisition of Israeli automation technology firm Panaya Ltd—put in her papers last week and is serving out her notice period, according to three people aware of the development.
Mint could not independently confirm the reason for her departure. An email sent to Suri on Monday hadn’t been answered as of press time.
Suri’s departure comes less than a month after Infosys said an investigation carried out by a US-based law firm did not find any wrongdoing in management’s decision to buy two firms, including Panaya and mobile commerce firm Skava.
Her exit comes on the heels of the departure of Infosys’s Americas head Sandeep Dadlani, who was overseeing one-third of the company’s annual business, or about $3.5 billion of its total annual revenue. Including Suri, at least 10 executives of the rank of executive vice-president (EVP) and above have quit Infosys since Sikka took over as first non-founder CEO in August 2014.
“While management did not comment on attrition among high performers, we have broader concerns about constant executive turnover,” Keith Bachman, an analyst at BMO Capital Markets, wrote in a 14 July note, after Infosys declared its earnings, and before Suri’s departure.
“We do not comment on speculations related to appointments or exits of executives other than key management personnel,” said an Infosys spokeswoman in an email to Mint.
Suri was Sikka’s former colleague at German business software giant SAP SE, and joined Infosys as a senior vice-president in September 2014 to head the company’s M&A team and newly formed $500-million innovation fund.
Elevated to EVP last year, she was one of the 16 SAP executives to join Infosys with the rank of associate vice-president and above since Sikka took over as CEO. However, since last March, four of these former SAP executives have quit Infosys, including the head of industrial internet business Gordon Muehl, EdgeVerve head Michael Reh and chief legal officer David Kennedy.
According to the executives mentioned above, Suri’s term was unconvincing at best, given Infosys’s mixed track record with acquisitions and start-up investments over the past three years.
Sikka entrusted Suri to lead M&A in December 2014, a role in which she continued for the next year-and-a-half. In July 2016, Sikka reversed his earlier decision and in a surprise move, asked Suri to head the large deals team at Infosys and tasked Deepak Padaki (who was the head of M&A before Suri was appointed) with the responsibility to once again lead the M&A team.
In the nine months starting February 2015, Infosys spent $390 million in buying three companies, including $200 million on automation firm Panaya, $120 million on mobile commerce firm Skava, and $70 million on Noah Consulting.
Infosys acquisition track record has been less than impressive recently.
Sample this: Infosys’s purchase agreement of mobile commerce firm Skava included a payment of $20 million, or Rs128 crore, as contingent money that is dependent upon the achievement of certain financial targets by Skava on 31 December 2017. For the year ended 31 March, Infosys paid only a third, or Rs40 crore, of this contingent money.
In the case of Noah Consulting, Infosys reversed its entire $5 million in contingent money payable to the selling shareholders. Panaya, the first purchase under Sikka, does not have any provision of contingent payments.
The acquisition of Panaya was controversial as a few employees and some Infosys founders, including N.R. Narayana Murthy, questioned the rationale to buy the Israeli company.
Infosys’s then chief financial officer, Rajiv Bansal, expressed his reservations and even walked out of a board meeting when board members were asked to approve a proposal to buy Panaya in February 2015. Bansal believed the acquisition was ill-thought-out and did not offer much by way of value to Infosys although he subsequently accepted the decision made by Sikka and board.
In February, two anonymous whistle-blower emails alleged wrongdoing in management’s decision to buy Panaya, and charged both Sikka and Suri with having profited from the deal as both were alleged to have prior investments in the firm.
Sikka, in an email to Mint on 20 February, defended the decision to buy Panaya, and dismissed the charges, calling them slanderous, and categorically denied that any executive was involved in any prior investments in Panaya.