'Vishal' shake up at Infosys; Sikka logs out as CEO

Infosys, one of the largest multinational IT services and consulting companies, is now without a permanent CEO and managing director after the abrupt resignation of Vishal Sikka. Earlier too, Murthy has publicly criticised Infosys over lapses in corporate governance, allegations that the company firmly denied repeatedly. The rumours all say that Sikka was forced to resign due to Murthy's inference and constant complaints on the way the company was being run.

While they strongly supported the idea of a founder or an Infosys insider taking over from Sikka, Murthy's views on frugality seem to be out of step with the managers.

That leaves any successor likely to continue to face a board at odds with powerful minority shareholders: the men who created the company and transformed outsourcing four decades ago. Sikka's severance will be keenly watched also because one of the founders' main objections was the hefty severance the company planned to pay to former chief financial officer Rajiv Bansal.

Shares of Infosys extended losses to a third session, falling as much as 1.53 per cent, after Vishal Sikka resigned as chief executive officer on Friday.

In a letter filed to the bourses on Friday, the day of Sikka's resignation, the board blamed Murthy's "continuous assault" as the primary reason for the exit of Infosys' first non-promoter CEO in its history.

On the day of Sikka's resignation itself, Infosys lost Rs 17,000 crore from the market capitalisation.

Sikka will help the company search a new MD and CEO and the deadline has been set for March 31, 2018. The company announced he was resigning as chief executive and managing director with immediate effect, but would stay on as executive vice chairman.

"Now I worry for the California-based executives he brought on-board - this will be a power shift back to Bangalore, and most (of) the guys Vishal brought on board will either jump ship or be pushed out very quickly", said HfS's Fersht.

The Board said Murthy repeatedly made "inappropriate" demands inconsistent with his stated desire for stronger governance, and his "campaign" intensified over time.

On Friday the stock had plummeted by about 10%.

While an independent probe absolved the board of any wrong doing, Murthy kept the pressure on by demanding that the company goes public with the full contents of the investigation report.

Former Infosys CFO V Balakrishnan told the paper Murthy was not the only one unhappy about the goings-on in Infosys, though he was the most vocal one. "He was trying to make Infosys an innovation-driven company, not a commoditised service provider", said an Infosys engineer who asked not to be named because of the sensitivity of the issue.

Vanessa Coleman

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