Bengaluru, Aug 18: In the latest development in Vishal Sikka's resignation, Infosys company has directly blamed its promoter founder NR Narayana Murthy for the cause.
An official statement by the company said, "Murthy's continuous assault, including this latest letter, is the primary reason that the CEO, Vishal Sikka, has resigned despite strong board support."
The statement also added that it has come to the attention of the company's board that "a letter authored by Murthy, the Founder of Infosys has been released to various media houses attacking the integrity of the Board and Management of the Company alleging falling corporate governance standards in the Company."
The company's board takes great umbrage to the contents of the letter and has called Murthy's allegations as "factual inaccuracies, already-disproved rumours, and statements extracted out of context from his conversations with Board members."
The company also said that despite trying to engage with Murthy within the boundaries of law and without compromising its independence but these dialogues have not been successful.
The statement alleged, "Murthy has made repeatedly made inappropriate demands which are inconsistent with his stated desire for stronger governance."
The company’s board has also assured its shareholders, employees, customers and communities that “it is committed not to be distracted by this misguided campaign by Murthy and will continue to adhere to the highest international standards of corporate governance as it executes its strategy of profitable growth for the benefit of all Infosys stakeholders”.
The company also said that ‘Murthy’s campaign against the board and the company’ has hindered the company’s efforts to transform itself.
The Board has been engaged in a dialogue with the Founder to resolve his concerns over the course of a year, trying earnestly to find feasible solutions within the boundaries of law and without compromising its independence. These dialogues have unfortunately not been successful.
“The Board declines to speculate about Murthy’s motive for carrying out this campaign, including the latest letter. The Board believes it must set the record straight on the false and misleading charges made by Murthy because his actions and demands are damaging the Company and misrepresent its commitment to good corporate governance,” the company said in a statement.
Since Vishal Sikka was appointed as MD and CEO in August 2014, Infosys has delivered competitive financial performance through profitable revenue growth. Infosys has, under the leadership of Vishal, developed and articulated a strategy to transform itself to meet the rapidly changing needs of the marketplace in the 21st century. The Company was lagging significantly behind industry in growth rates when Vishal took over and now we are in top quartile from a performance perspective, the company said.
Infosys has grown in revenues, from $2.13 billion in Q1FY15 to $2.65 billion this past Q1. This was done while keeping a strong focus on margins, closing this past quarter at 24.1% operating margin, beating some competitors for the first time in many years, and improving against nearly everyone in the industry.
The revenue per employee of the Company has grown for six quarters in a row. Attrition has fallen, from 23.4% in Q1FY15 to 16.9% this past Q1, and high performer attrition is much lower than the overall Company attrition.
The Company grew its $100 million+ clients from 12 in Q1FY15 to 18 this past Q1 and increased its large deal wins from approximately $1.9 billion in FY15 to about $3.5 billion this past year. This has all been done while improving overall utilisation (excluding trainees), to a 15-year high this past quarter, and an all-time high including trainees, while improving our cash reserves, rewarding Infoscions with a new equity plan, and returning Rs 19,000 crore as dividend (including dividend distribution tax) over the last three years. This has all been done while improving standing with clients, to the highest ever in the 12 years with a jump of 22 points in CXO satisfaction.
Extremely Anguished
Meanwhile, Infosys Co-Founder N R Narayana Murthy on Friday said he was extremely anguished by the allegations, tone and tenor of the statements made by the company's board.
In a statement issued to the media post the resignation of Vishal Sikka as MD and CEO of Infosys, Murthy said, "I voluntarily left the Board in 2014 and am not seeking any money, position for my children or power. My concern primarily was the deteriorating standard of corporate governance which I have repeatedly brought to the notice of the Infosys Board," he said.
Murthy said in the statement that it was below his dignity to respond to such baseless insinuations. "However, several shareholders who have read the whistle-blower report have told me that it is hard to believe a report produced by a set of lawyers hired by a set of accused, giving a clean chit to the accused, and the accused refusing to disclose why they got a clean chit!. They say that this is not the way an impartial and objective investigation should be held."
Murthy said he will reply to these allegations in the right manner and in the right forum and at the appropriate time.
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