Infosys Chief Executive Officer Vishal Sikka on Thursday asked the company’s employees to dismiss media speculation about the company’s affairs and said reports were being “designed to stir up gossip”. In a letter to employees, Sikka asked them not to get distracted by the reports, “or anything that questions our commitment to governance, integrity and values”, The Indian Express reported.
Sikka’s letter is his first reaction to recent reports that Infosys founders NR Narayana Murthy, Kris Gopalakrishnan and Nandan Nilekani had raised several governance concerns with the company’s board. The founders had reportedly also raised the issue of pay hikes and severance packages given to Sikka and other senior Infosys executives.
Meanwhile, OppenheimerFunds – the third-largest institutional investor in the company – backed Sikka and said the founders needed to accept that it was a publicly listed entity and was no longer “their company”, The Economic Times reported. In an open letter to Infosys’ board, Oppenheimer Developing Markets Fund Portfolio Manager Justin Leverenz said there had been “loud, cancerous rumours of intervention by non-executive founders in the management team”.
“Vishal has stabilised the core and articulated a clear – and appropriate – long-term strategy to help Infosys thrive amidst industry disruption,” Leverenz said. OppenheimerFunds owns about 2.7% of Infosys, with its holding valued at over $900 million (approximately Rs 6,016. crore).
Separately, Murthy said the company’s founders had issues with the “quality of governance at the board” and not with Sikka, The Times of India reported. Murthy said he was concerned that the the large payouts and packages for senior executives was affecting employee morale. “I have received over 1,800 emails from various employees expressing their unhappiness at this situation...What kind of signal does this send to employees?”
The firm’s chief finance officer V Balakrishnan said Chairman R Seshasayee must resign, NDTV reported. “Communication between important shareholders and the board has broken down. The chairman should step down; have an interim chairman, the board should be reconstituted and all concerns should be addressed,” Balakrishnan told the channel. Seshasayee had extended his support to Sikka and said the company is “fully aligned” with his “strategic direction.”
On Wednesday, the company’s shares dropped over one percent on the Bombay Stock Exchange Sensex. It was reported that the company’s founders were also considering a share buyback worth Rs 12,000 crore to return its idle cash to its shareholders. In January, Infosys had posted a 7% jump in its consolidated net profit for the October-December quarter. For the calendar year 2016, the company’s revenues crossed $10 billion (approximately Rs 66,000 crore), Sikka had said.