Rift between the founders and the management board in Infosys has been widening since more than one year now. The two sides are at loggerheads over the large severance paid to former CEO Rajiv Bansal, disclosed in 2016, and CEO Vishal Sikka ($11million).The founders are upset and as per several media reports, some promoters were also upset with the appointment of Punita Kumar-Sinha, an investment banker and wife of Union minister Jayant Sinha, as an independent director.
However, the main reason behind the dispute is governance issue and “violation of core
ET reported some of the founders have held the board responsible for what they perceive to be its inability to enforce governance norms. In July 2016, one of Infosys' prominent promoters reached out to a top legal professional in Mumbai.
The agenda: to hunt for a co-chairman for Infosys. This, despite the fact that
"The idea was to look for someone who understood core values of Infosys,” an executive told ET.
A few names were thrown up as candidates, including a former Infosys finance hotshot and a retired founder. But the idea fizzled out as Seshasayee stepped down on July 28 as non-executive vice-chairman of Ashok Leyland - a post he had held since 2011- to focus on Infosys.
Industry experts told ET the situation is not yet past the point of no return. "The end goal is the promoters, the board and the management should be aligned. I don't think the situation is irredeemable. If the founders air their problems, this could still be resolved. This isn't like the Tata case,” Shriram Subramanian, MD of shareholder advisory firm InGovern, told ET.
Meanwhile, efforts are going on resolve the dispute. ET quoted two people saying among those involved is a prominent investor in the company - Baburaj Pillai.
Reports of disputes over "internal governance issues, between some of the company's founders and a management keen on charting a new path have spurred efforts to broker peace by the Singapore-based fund manager as well as other influential people, said the sources cited above.
Pillai, the founder of investment firm Arohi Capital, met with co-founder NR Narayana Murthy and chief executive officer
"Pillai met with both of them to try and create common ground. He does not want Sikka to be forced to leave and he also does not want Murthy to feel as though his voice is not important,” one of the people aware of the discussions told ET.
"With regard to concerns on governance being discussed in the media, we would like to reiterate that all decisions have been made bona fide, in the overall interest of the company, and that full disclosures have already been made thereon,” Infosys told ET in a statement.