NR Narayana Murthy wants Infosys Board to make report on key acquisitions public; here’s why

By: | Published: August 4, 2017 6:31 AM

The company had stated that the investigative report prepared by two external agencies had found no evidence to prove these allegations.

Infosys founder NR Narayana Murthy has asked the company’s Board to make public, the contents of the report that probed into alleged irregularities involving certain key acquisitions. (Image: Reuters)

Infosys founder NR Narayana Murthy has asked the company’s Board to make public, the contents of the report that probed into alleged irregularities involving certain key acquisitions. Infosys, however, has stated that the company does not want to make the report public, in a response to FE’s query on the matter. The company had stated that the investigative report carried out by two external agencies had found no evidence to prove these allegations. Earlier, anonymous complaints had alleged that there were irregularities in connection with company’s acquisitions of Panaya and Skava in 2015. It had also alleged that the mergers and acquisitions team had acted without securing proper approvals. It also stated that CEO Vishal Sikka had received inappropriate compensation and incurred excessive expenses relating to travel, security and the Palo Alto office.

According to sources, Murthy has sought further clarity on the financial transactions in the acquisitions done by Infosys especially with regard to Panaya and also a closer scrutiny on the executives involved in these transactions. Murthy had in February this year publicly raised certain corporate governance issues at Infosys which also included severance payments made to former CFO Rajiv Bansal and former general consul David Kennedy. He felt that it was the board’s responsibility to ensure the corporate governance standards.

Infosys then conducted an investigation with the help of external agencies which included Gibson Dunn & Crutcher, Control Risks and Khaitan & Company. As disclosed in June, the summary of the report had said, “We found no evidence whatsoever to support any of the new allegations in the complaints regarding wrongdoing by the company or its directors and employees, and those allegations were rebutted by substantial and credible evidence.” According to Infosys, the investigation by the external agencies involved interviews of over 50 witnesses in India, the United States, and elsewhere.

It also involved the review of company policies, Board minutes, public filings and internal documents, the collection, search and review of many thousands of internal emails and attachments, the use of forensic accounting experts to analyze technical and financial information, the review of public filings and media accounts in multiple countries. The fresh salvo by Murthy is likely further strain the relationship between the Board and the founders. The board has already formed a committee to act as a bridge between the two group even as chairman R Seshasayee has consistently stated that they have harmonious relationship with the founders.

Seshasayee during the recently conducted AGM had said, “The Board has continuously engaged with all major investors in particular with the founders, and will continue to do so.” The chairman also said that he will complete his term which ends in May next year. The Infosys board had recently elevated Ravi Venkatesan as the co-chairman.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Switch to Hindi Edition