As Infosys battle escalates, Ravi Venkatesan meets Arun Jaitley, Narayana Murthy sets up analyst call

Infosys co-chairman Ravi Venkatesan on Tuesday met finance minister Arun Jaitley even as media reports suggested a more fierce battle may be brewing between the co-founders and the current management.

According to sources, Venkatesan met the minister and is believed to have apprised him of the developments at Infosys after the sudden resignation of Vishal Sikka last Friday, as also the steps being taken to keep the shareholders informed.

Infosys was not available for comment, a PTI report said.

Last Friday, the first non-founder CEO of Infosys, Sikka resigned from the company following months of acrimony with high-profile founders, led by NR Narayana Murthy, citing "malicious" and "personal attacks" on him.

File image of Finance Minister Arun Jaitley. AP.

File image of Finance Minister Arun Jaitley. AP.

While Sikka did not name Murthy for his exit, the Board of the $10 billion firm blamed the founder for "continuous assault" through "factually inaccurate" and "already-disproved rumours" for the resignation of the CEO.

Murthy, however, maintained that his only concerns are the lapses in corporate governance standards, something that Infosys was admired for at one point.

With the war of words escalating, a report in The Times of India said both the management and the co-founders are trying to win supporters for themselves. The report said Murthy, who is being accused by many as responsible for the exit of Sikka, is holding a conference call with the analysts today purportedly to explain his concerns.

According to ICICI Securities, the fortunes of Infosys were linked to just one person - Sikka. With his exit, there is a huge uncertainty about the company's strategy going forward.

It is also to be remembered that Murthy has not yet responded to the board's frontal attack on him holding him solely responsible for Sikka's resignation.

Another report in The Economic Times said both the camps are likely to garner support for an extraordinary general meeting.

Meanwhile, investor advisory firms are raising uncomfortable questions over the timing of the company's share buyback decision, taken just a day after Sikka's resignation.

Sebi chief Ajay Tyagi on Tuesday said the capital markets regulator is keeping a close watch on the price movement of the stock.

On 18 August, the day Sikka announced his resignation, the company's shares plummeted nearly 10 percent, with its market valuation falling by over Rs 22,518 crore in a single day. On Monday, the stock went down further despite the buyback announced on Saturday as investors remained jittery over the war of words between the board and the co-founders and its impact on the prospects of the company.

Once the poster boy of Indian IT success story and considered a bellwether among Indian tech stocks, Infosys has had to battle challenges like an uncertain business environment, senior level exits and increased visa scrutiny in key markets like the US and the UK.

Troubles mounted for Infosys when an anonymous letter was sent to the market regulators in February this year, alleging that its acquisition of Panaya was overvalued and that some Infosys executives may have benefited from the deal.

While an independent probe absolved the board of any wrong doing, Murthy kept insisting that the company goes public with the full contents of the investigation report. Infosys has so far refused to make it public.

(With inputs from PTI)

Updated Date: Aug 23, 2017 08:24 AM