Amid a feud between the board of Infosys and co-founder NR Narayana Murthy, company’s co-chairman Ravi Venkatesan on Tuesday called on finance and corporate affairs minister Arun Jaitley.
Amid a feud between the board of Infosys and co-founder NR Narayana Murthy, company’s co-chairman Ravi Venkatesan on Tuesday called on finance and corporate affairs minister Arun Jaitley. Venkatesan is believed to have briefed Jaitley about the developments at Infosys and assured the minister of no let-up in corporate governance standards at the company, contrary to the allegations labelled by Murthy. Last week, Vishal Sikka resigned as the CEO and managing director of Infosys, saying the assault on him by Murthy had become increasingly malicious and personal. The company’s board came out in support of Sikka, hailing his performance in transforming the company and attributing his resignation to Murthy’s continuous assault on him. Murthy had on several occasions in recent months raised issues of “deteriorating standard of corporate governance” at the company he founded with others 36 years ago. He had alleged that the company might have paid hush money to former chief financial officer Rajiv Bansal and that the Panaya acquisition had not been above board. The allegations, however, have been strongly rejected by the company’s board.
Sebi’s vigil on Infy share price
Sebi chairman Ajay Tyagi on Tuesday said the markets regulator is keeping a vigil on the share price movement of Infosys. “We are keeping a watch on Infosys share prices,” Tyagi said here. Infosys’ shares tanked almost 10% last Friday, responding to the news of Sikka’s resignation, wiping out Rs 22,519 crore from its market valuation. The software giant on Saturday announced that its board had approved a share buyback offer of up to Rs 13,000 crore. However, the buyback plan failed to enthuse market participants and the shares dropped further over 5% on Monday. However, the share price inched up 0.4% on the BSE on Tuesday, compared with a 0.1% rise in the Sensex.
Tyagi also said a panel on corporate governance is expected to submit its report by the end of September. Sebi had set up a committee in June under Kotak Mahindra Bank chief Uday Kotak for suggestions to improve corporate governance standards of listed companies. He said Sebi will stick to its December deadline for linking Aadhaar with e-KYC for trading accounts. The decision is aimed at curbing money laundering and tax evasion through stock markets.
Murthy’s concall with investors today
infosys founder NR Narayana Murthy will hold a conference call with investors on Wednesday presumably to explain his stand on the ongoing standoff with the board of directors of the company. Murthy’s interaction with the investor community comes at a time when there is growing concern about the company’s future. The industry is expecting some strong words from Murthy during the investor call, especially considering the criticism by the Board. The Infosys scrip had lost close to Rs 34,000 crore in two trading sessions on Friday and Monday. On Tuesday, the scrip stabilised to end at Rs 877.15 with a marginal gain of 0.42% on the BSE. Sikka had announced his exit on Friday morning. At the end of trading hours on Thursday, the Infosys scrip had closed at Rs 1,021.15.
According to sources, a section of Infosys investors had reached out to Murthy seeking an early resolution to the dispute. “The investors are worried about the way in which the company is now managed,” a person familiar with the development told FE. The promoter group holds a 12.75% stake in the company. Murthy’s call with analysts comes at a time when the board is making attempts to reach out to clients and institutional investors. Infosys co-chairman Ravi Venkatesan has talked about going on a multi-city tour to talk to the investors, to restore confidence.