The ongoing tussle between NR Narayana Murthy, founder of Infosys, and the board turned murkier as the veteran has reportedly asked the findings of the law firm Cyril Amarchand Mangaldas relating to corporate governance lapses to be made public. Earlier,Infosys had hired Cyril Amarchand Mangaldas to review the corporate governance practices in the company. The law firm was to gather inputs from the promoters and other key stakeholders and evaluate them to make recommendations to the board. Previously, the founders had raised issues pertaining to the quantum of salary hike given to the CEO Vishal Sikka and the size of the severance packages given to former CFO Rajiv Bansal and former General Counsel David Kennedy.
Infosys had reportedly paid Rs 23.02 crore severance pay, salary and other benefits to Rajiv Bansal in 2015, which at the time drew flak from advisory firms and analysts for an unusually high compensation given to a parting executive. The company also came under severe scrutiny after news reports of whistleblower complaints to SEBI, alleging improprieties in acquisition of the software company Panaya emerged. According to ET Now, Narayana Murthy sought full details of the probe, and wanted complete disclosure on the relationship between executives of Infosys and Panaya’s investors in the interest of transparency.
Earlier, Murthy had questioned the ability of the board, led by Seshasayee, on certain decisions taken by the company in the last one year, feeling that the board should have been more proactive in questioning the decisions at their end. Infosys management’s efforts to contain the damage and smooth over the issues with the founder group too sort of backfired with the founders again expressing their unhappiness over the appointment of a law firm for mediation.
R Seshasayee also tried to dispel all allegations of misgovernance, saying that Sikka’s compensation package came with very ambitious targets of meeting its goals set for 2020, and that it was finalised in line with the best global standards to promote Sikka’s longevity in the company and to motivate him to lead the company. At the same time, Seshasayee also admitted that the company might have erred in awarding a high severance package to ex-CFO Rajiv Bansal, adding that out of the agreed amount, the company decided to pay Bansal only Rs 5 crore later, with the remaining amount being withheld pending clarifications on the terms of the severance contract.
On its part, Infosys board has denied any lapses in governance and has explicitly supported Sikka. “The Board is fully aligned with the strategic direction of Dr Vishal Sikka and is very appreciative of the initiatives taken by him in pursuance of this transformation,” R Seshasayee, the Chairman of the board, had said in a company statement.The board and Vishal Sikka had sought to downplay the issue, saying that the concerns raised have been in public domain for quite some time and that the board had already obtained shareholder approval on the matters. The company does not plan to make the report public, ET Now said, citing unidentified sources.