Infosys Chaos

Three years ago, 14 June 2014 Vishal Sikka Indian origin American Citizen, but who work for German company SAP was appointed as the chief executive officer of Infosys and he started work on August 1. This decision was welcomed everywhere. Not only in the computer industry but in the family or promoting companies, the outsider does not usually get the highest rank in India (including politics). This position can be obtained by a person or a promoter of the family or their children. This is the tradition from everywhere, even from Tata, Birla and Ambani. The same tradition is observed even if their own family or promoters have 10-20 percent stake and the company is listed in the stock market. Swaraj Paul (British Indian) challenged this practice a few decades ago to escort’s Nanda, but he was failed. On this backdrop, the assignment of Vishal Sikka was different.

But in April last year, the founder Narayan Murthy expressed dissatisfaction over some issues. After making director the Minister Jayant Sinha's wife Punitakumar, Murthy said we did not bring any person of a politician as a director, then he started expressing anger over this principle. According to the Infosys principle, the heads salary of the company could not be more than 50 times higher than the median salary (in which the stock option was not evaluated). While living in a United States, Sikka's salary was more than 50 times in the numerical value of the rupee as per international standard. Nandan Nilekani voted in favor of this resolution but it was not acceptable by the Murthy. Two years ago, in February, Infosys bought an Israeli company for Rs. 1300 crores. The company's directors received anonymous letters about the suspicion that some of the officials of the SAP Company were related to this transaction and there were some opaque transactions. In addition, October 2015 the company's chief financial officer Rajiv Bansal resigns. The Murthy again scold that the compensation given to him is very high. This year, the company's chief law officer David Kennedy came out and there was a similar controversy over his wages.

On these issues, sending anonymous letters to the directors and after some days, Murthy have been exposed to public accusations. Company Directors have taken note of these issues and said we have made a mistake in Bansal and we have agreed that we will improve it. There is news in market that Bansal should be aware of the company's opaque dealings and that’s reason for his huge wages. The company denied such rumors. Although the company has repeatedly disclosed that Punit Sinha is not been appointed as an associate of Jayant or Yashwant Sinha, but Vishal Sikka has been repeatedly accused of breaking the tradition of company.

Sikka said there is no any opaque in Panaya acquisition. But after the Bansal case and due to repeated allegations, the company inquired this issue. As per the complaint filed with SEBI, the company given 25 percent more money in this transaction and the benefit was made to some related people. At the same time, the same accusations were made by Murthy. Rajeev Bansal was given Rs 17-18 crores just to shut mouth. But the board of directors disclosed that the director of the transaction of PANAYA has verified all the issues and it is beneficial for comapny. Despite all this, the allegations of Murthy are still pending! At the end, the Board spent billions of rupees from an American law firm and an international company, and returned the transaction back to full investigation. Revealed an explanation of the query. Murthy said if we were running a company, then this whole report would have been published publicly and criticize that Sikka is not worth the chief executive. After all this Vishal Sikka given resignation as CEO of Infosys.

It is not good to see who is wrong or who is right. But it was wrong for future of company. Company's world wide image is dampened by the founders. Before that Tata has shocked the global image of Indian industry. Today, while comparing Chinese and Indian industries, honesty of Indian companies, law and order and other things can be credited. But now this world image has got torn apart. It is understood from the way that foreign investors sold Infosys shares in the last few days and the capital cost of the company fell below Rs 22,500 crore in a day. Infosys major customers are in the US so there will be bad impact on their business.

Some people like JRD Tata had the courage to leave the company forever. Murthy’s If I go, listen to me, if it is a sculpture or ego, then it is dangerous. For the many years, Infosys was run by a certain ideology. But when you choose to be a global image, American minded person then he will be different from current method of work and thinking. Then why issue of Tradition?

If all the promoters have 15 percent of the company's capital, then why should company listen to one of them. They also have their obligation and responsibility towards the other 85% shareholders . Luckily the directors of the board are with Sikka and they does not listen to Murthy and that is the pain for him. The same allegations repeatedly created an atmosphere of suspicion. This situation makes loss to the entire Indian business and not only Infosys. CEO Resignation and same time BuyBack is definitely wrong timing.

Personal Thinking.

Thank You.

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