Software major’s Board blames Murthy’s dictatorial ways for Vishal Sikka’s resignation as Infosys CEO. Hours later Murthy denies having ever made any comments against Sikka’s style of functioning and says he will reply to the Board’s allegations at an appropriate time
In developments reminiscent of the internal turmoil that had rocked the Tata group a year ago, the divide between the Old and the New Guard in software major Infosys came to the fore on Friday.
It all began with the sudden resignation of the company’s managing director and chief executive officer, Vishal Sikka, on Friday morning who blamed his decision on “malicious and increasingly personal attacks” made against him by “the very people from whom we all expected the most steadfast support”. Sikka’s resignation letter and another note that he sent to his employees in which he spoke about an “untenable atmosphere” was seen as a veiled attack on Murthy.
As Sikka’s resignation and his comments about it went viral on various media platforms, the Infosys Board came out in his support, categorically blaming Murthy’s “continuous assault” on the top executive as the reason for his exit.
By Friday evening, Murthy too issued a statement asserting that “It is below my dignity to respond to such baseless insinuations” while adding that he would reply to all allegations in the right manner and forum and at an appropriate time.
An official communication released to the bourses by the Infosys Board stated: “Mr. Murthy’s continuous assault, including this latest letter, is the primary reason that the CEO, Dr Vishal Sikka, has resigned despite strong Board support.”
The letter that the statement mentioned was a reference to an e-mail which was leaked to certain sections of the media in which Murthy had purportedly claimed in a communication to some of his advisors that he was told by at least three independent directors at Infosys that Vishal Sikka “was more chief technology officer (CTO) material than chief executive officer (CEO) material”.
“Murthy’s letter contains factual inaccuracies, already-disproved rumours, and statements extracted out of context from his conversations with Board members,” the Infosys statement said.
However, Murthy partly rebutted the claims of the Infosys Board saying: “I have not commented on Sikka’s work, my problem is with governance at Infosys; I believe fault lies with the board.”
The Inforsys founder added that he was “extremely anguished by the allegations, tone and tenor of the statement. I voluntarily left the board in 2014 and am not seeking any money, position for children or power. My concern primarily was the deteriorating standard of corporate governance which I have repeatedly brought to the notice of the Infosys board.”
It is evident from the exchanges between Sikka, the Infosys Board and Murthy that the war of words will only get uglier in the days to come, especially since the Board made it clear that it is “fully independent, with professionals as its members who have been appointed by a clear majority of the shareholders” and that it would not give the founder a formal role in the company’s governance.