Infosys founder Narayana Murthy says 'disappointed' with company's decision over ex-CFO's payout

Image: Bobby Yip / Reuters

Infosys founder NR Narayana Murthy has stuck to his guns on the issue of “governance deficits” at India’s second biggest IT services provider. In a statement sent to reporters late on Tuesday, Murthy termed as disappointing, the company’s decision earlier that day to not release the full findings of an investigation into allegations made by a whistleblower.

“I am disappointed,” he said in the statement and added, the “core question” remains as to why such a large payout was agreed upon for former CFO Rajiv Bansal, who was awarded about Rs 17.4 crore in severance pay, when he left the company in December 2016. Murthy had demanded that the full findings of the investigation be made public.

Murthy’s public fight over this issue with the then board of directors of the company, led by R Seshasayee as chairman and Vishal Sikka as CEO, precipitated Sikka’s departure on August 18. Nandan Nilekani, co-founder of Infosys was named by the board as the new non-executive chairman, on August 24 and given a free hand as Seshasayee and two other directors quit as well at the same time.

On August 29, Murthy held a call with investors and cited again the allegations made by an anomymous whistleblower in complaints to the Securities and Exchange Board of India in February. The allegations include complaints about the overvaluation of Panaya Inc., an Israeli software autmoation company that Infosys acquired in 2015, and the implication that the payout to Bansal, was connected to the deal.

The summary findings of the independent investigation by two international law firms, which Infosys made public in June, and which exonerated Sikka and the board of any wrong doing, didn’t go far enough Murthy has held.

Nilekani, who had promised a full review of the matter at the time, said on Tuesday that he had concluded that the independent investigators were right to find no wrong doing on anyone’s part, after looking into the CFO’s payout and related allegations made by the whistleblower.

While both Murthy and the then board had acted with a lot of “passion” grounded in their respective views of what was good for the company, the matter should now be allowed to rest, and publishing the full report would hinder the company’s functioning in the future, Nilekani said in a press release on Tuesday.

Murthy’s full statement reads as follows: ”I stand by every question on poor governance raised in my speech to Infosys investors dated August 29, 2017. The fact remains that none of these questions have been answered by the Infosys board with the transparency it deserves. I am disappointed. The core question still is how and why the Infosys board approved an unusual and unprecedented severance payment agreement of 1000 percent (of the standard Infosys employment contracts) to the former CFO, and why the board did not disclose this information proactively and much earlier. Sadly, it appears we will no longer know the truth.”