In a long-awaited call with analysts and investors, Infosys Ltd’s founder N.R. Narayana Murthy said, “Now, we can all sleep better knowing that, under his (Nandan Nilekani’s) leadership, corporate governance at Infosys will be on par with the global best standard."

Some investors, however, are still a bit restless, as the higher-than-usual volumes on the stock’s counter suggest. Besides, the company’s shares are still 9% lower since former chief executive Vishal Sikka announced his sudden resignation. While things have been calmer since Nilekani’s appointment, investors still have concerns and questions.

In the two conference calls with Nilekani soon after his appointment, analysts kept coming back to the allegations of poor corporate governance under the previous regime, and whether the newly constituted board would release the investigation reports Murthy has been asking for. The new chairman was non-committal.

An analyst at a multinational brokerage firm, who attended both Nilekani’s and Murthy’s calls, said their tone and choice of words suggested they want to move forward, rather than insist on previous demands such as the release of the investigation reports. But considering all the bad blood that has flowed between Murthy and the previous board, these issues can’t just be brushed under the carpet.

If the new board now stays completely silent about the contents of the investigation reports, it will accentuate concerns that the founders put the company in a state of flux for no good reason. This will be akin to the struggle of the US in proving that Iraq indeed had weapons of mass destruction (WMDs) hidden, in order to defend its decision to invade the country.

But unlike the US and its search for WMDs, Infosys is in a far more precarious situation, best described as “damned if you do, damned if you don’t".

Abhiram Eleswarapu of BNP Paribas put it succinctly in one of the calls with Nilekani: If the new chairman doesn’t find anything untoward after investigating the allegations against the previous board and management, then it would mean that the disruptions by the founders had no good reasons to start with. But even if he does find merit in the allegations, it will just reaffirm concerns that one set of shareholders is more privy to information related to the company than others.

Needless to say, an admission of wrongdoing will also bring with it related legal and regulatory consequences. In short, Infosys is not in a pretty place. Murthy might be able to sleep easy because a co- founder is at the top again. But, ironically, that’s sufficient reason for investors to be worried. The fact that some investors are still nervous is understandable.

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