Former Infosys board member slams Murthy, sides with Sikka in open letter
“Learn to walk away, as you had promised when handing the reins to Vishal,” Omkar Goswami, Infosys’ former board member and a current member of its business process outsourcing (BPO) unit has said in an open letter to founder NR Narayana Murthy.
In an open letter Goswami penned for The Economic Times, he tells Murthy: “Your actions have de-facto created a crisis that has forced the exit of a CEO, led to a stupendous 9.6 percent drop in the share price, and a loss in market capitalisation of over Rs 22,600 crore in one trading day, and initiated the process of class-action suits in the US. Despite my friendship with you and the tradition that most directors strive to follow where board matters remain within the board, I have finally decided to come out in the open.”
Goswami, an Infosys Board member from 2000-2015, then goes on to briefly explain the events that led to the resignation of Chief Executive Vishal Sikka on August 18.
He also takes a jibe at former Chief Financial Officer V Balakrishnan and former heard of human resources Mohandas Pai, saying that each ex-independent director of the board was “deeply upset” by their and Murthy’s public conduct.
In a letter filed to the exchanges on the day of Sikka’s resignation, the board blamed Murthy’s “continuous assault” as the primary reason for Infosys’ first non-co-founder CEO in its history. The letter also said that Sikka had the Board’s full support.
Goswami explains how the Board agreed to most of Murthy’s demands over the last year — freezing former CFO Rajiv Bansal’s huge severance pay at 30 percent of the agreed amount, appointing DN Prahlad, an ex-Infoscian a relative of Murthy’s, to the Board, investigating the USD 200 million acquisition of Israeli software firm Panaya, and appointing Ravi Venkatesan as Co-Chairman of the Board.
“The Panaya report absolved the management of wrongdoings, and its basic conclusions were disseminated to the public. My first question: would you have posted the full report if you were running Infosys? You wouldn’t, as you didn’t in instances that needed detailed investigation.
You then wanted a Co-chairman who met with your approval. Here, too, the board complied by elevating Ravi Venkatesan. By accommodating you, it created a fiduciary eccentricity of three different people at the top: a chair, a co-chair and a managing director and CEO,” Goswami says.
He further says that all these actions will affect the high governance standards of Infosys, and that Murthy would lose respect for him.“Enough is enough. You have drawn first blood. Do not mortally wound the organisation by persisting in your actions. Let Infosys get on with its business, heal itself from the injuries that you have inflicted and again grow shareholder value. Learn to walk away, as you had promised when handing the reins to Vishal. The corporate governance halo that was conferred upon you is shrinking. Let it not disappear,” he added.