Bengaluru: On Sunday, Infosys Ltd co-founder N.R. Narayana Murthy turned 71, but it is unlikely to have been a happy birthday for one of the doyens of the Indian IT services business.
Murthy, three people familiar with the matter, said on the condition of anonymity, was taken aback by the tone of the board’s letter following CEO Vishal Sikka’s resignation.
The letter blamed Murthy for Sikka’s exit.
He is also upset that the three independent directors, including co-chairman Ravi Venkatesan, whom he cited in a 9 August letter as having told him that Sikka was not really CEO material (but CTO material), did not support him following the CEO’s exit, the three added.
Murthy has been pressing the board to release the reports of investigations into Infosys's Panaya acquisition and the severance package originally offered to former chief financial officer Rajiv Bansal. Both are subject of whistleblower complaints and Infosys, after investigations by reputed law firms, has said there is no evidence of wrongdoing.
In his 9 August and 14 August emails to some of his advisers, Murthy is at pains to make the point that his primary issue is with the board and what he says as potential lapses in governance, not Vishal Sikka.
Murthy did not respond to an email questionnaire sent on Sunday. Venkatesan declined to comment for this story.
Infosys has already denied that there was any discord between the board and Sikka.
“Mr. Murthy’s continuous assault, including this latest letter, is the primary reason that the CEO, Dr. Vishal Sikka, has resigned despite strong Board support," said Infosys in the above mentioned statement. “Co-chair of the board Ravi Venkatesan has repeatedly over the past few weeks publicly stated his and the board’s support for Dr. Sikka. The company categorically rejects any speculation or allegation of discord between the Infosys board and Dr. Sikka."
The three people said Murthy believes he is being unfairly blamed for Sikka’s exit, when some board members were themselves questioning Sikka’s performance as the CEO.
Earlier in April, Infosys appointed a three-member panel to “support and advise" Sikka in executing strategy, the three pointed out.
According to the people mentioned above, the scathing letter from Infosys has done lasting damage to relations between Murthy and the directors, as well as investor confidence in the company.
The relationship between Murthy and the board has hit rock bottom, they added, with no chance of reconciliation possible any time in the near term.
At least two institutional investors, who requested anonymity, said that Infosys’s board has not asked investors to mediate between the company and the founders since the start of the year.
One of the heads of the funds, which holds more than 2% shares in Infosys, told Mint that the current situation at Infosys was a result of the board being “dysfunctional" and failing to take decisive steps to remedy the situation over the past 18 months.
“There is no room left for mediation. That road is shut. This group has burnt all bridges," said one of the people mentioned above.
To complicate things, the board’s decision to issue the scathing statement on Murthy was not unanimous, but rather a majority decision—according to the three people mentioned above.