N.R. Narayana Murthy, one of the seven founders of Infosys, on Tuesday said he was “disappointed” by the board clearing former CEO Vishal Sikka and his management members on issues of corporate governance and irregularities on a $200 million acquisition.
“I stand by every question on poor governance raised in my speech to Infosys investors dated August 29, 2017,” Mr. Murthy said in an e-mailed statement. “The fact remains that none of these questions have been answered by the Infosys board by the transparency it deserves.”
Infosys, India’s second-largest software exporter and the first company to introduce employee stock option plan, got listed in the exchanges in 1993. It was set up in 1981 by Mr. Murthy after he borrowed ₹10,000 from his wife. Six other employees joined him soon.
Mr. Murthy was at the head of the company until 2002 and later continued as ‘chief mentor’ and Chairman until 2011. He rejoined Infosys as Executive Chairman in 2013 after the company reported disappointing earnings.
He led a bitter public battle with former CEO and managing director Mr. Sikka on alleged irregularities in the acquisition of an Israeli company, Panaya and the severance package paid to former CFO Rajiv Bansal.
Infosys, after conducting a review of all external probes on contentious issues of Panaya acquisition and severance pay to former CFO, said on Tuesday “there was no merit to the allegations of wrongdoing” and it would not make the report made by Gibson Dunn & Crutcher and Control Risks public — a key demand made by Mr. Murthy.
Current Chairman Nandan Nilekani said the severance payments to Mr. Bansal could have been better handled, and the company had identified opportunities for improvements in processes and practices, which have been implemented.
“I am disappointed,” he said. “The core question is how and why the Infosys board approved an unusual and unprecedented severance payment agreement of 1,000% (of the standard Infosys employment contracts) to the former CFO, and why the board did not disclose this information proactively and much earlier. Sadly, it appears we will no longer know the truth.”
