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Will Go When Stability Returns To Infosys, Says Nandan Nilekani

NDTV logo NDTV 25-08-2017

In his first concall with investors after he was named chairman of Infosys, Nandan Nilekani, said on Friday morning that it was premature for him to comment on the IT major's strategy, guidance and earnings, but said he was "committed to the highest standards of corporate governance." Mr Nilekani also said that he "will go when stability returns."

Mr Nilekani, who is one of the founders of Infosys and a former head, also said, "I am an admirer of NR Narayana Murthy and will ensure that Infosys, Murthy and other founders have a healthy relationship."

Mr Nilekani was named the company's non-executive chairman on Thursday in a bid to end a lengthy feud between the board and the company's founders, including Mr Murthy. He said today that his role will be oversight, governance and functioning and that he will also help with the hunt for a new CEO, after Vishal Sikka resigned recently.

Complete coverage on Infosys crisis

Mr Nilekani's appointment is expected to reassure employees and clients, and quell shareholder concerns after the shock resignation of Vishal Sikka last week spooked investors and wiped billions of dollars from the company's market value.

Mr Nilekani, credited for driving up Infosys' annual revenue four-fold to $2 billion during his 2002-2007 tenure as CEO, will also be a non-independent director with immediate effect, India's No. 2 IT services firm said in a statement.

Chairman R Seshasayee, Sikka, who was serving as executive vice-chairman after exit as CEO, and two other directors resigned as part of the board shake-up. Ravi Venkatesan stepped down as co-chair, but will continue as an independent director on the board, Infosys said.

The Infosys board will try to engage with all shareholders as a matter of priority, Mr Nilekani had said in the statement on Thursday.

Following Mr Sikka's exit, Mr Nilekani, the architect of India's ambitious biometric identity programme, was widely expected to return to Infosys, whose board has been tangled in a protracted public spat with founder Narayana Murthy, who accused the board of corporate governance lapses.

Disagreements between founders and the board centred around a rise in Mr Sikka's pay, the acquisition of Israeli automation firm Panaya for $200 million and a severance package offered to a former finance chief.

Media reports on Mr Nilekani's likely return had already boosted investor confidence and pushed the stock higher over its last two trading sessions.

Shriram Subramanian of shareholder advocacy group InGovern said Nilekani-led Infosys urgently needed to formally address corporate governance concerns raised by the founders.

"Otherwise it would be a complete eyewash," he said. "Other shareholders will be completely clueless as to why the board succumbed to pressure from founders."

Mr Nilekani returns to the Bengaluru-headquartered company at a time when Indian outsourcers have been dented by cautious client spends in their biggest market, the United States, and as they brace for changes to a U.S. work visa program they have heavily relied on in the past to fly engineers into the country. "It's a good development as the company has got a credible face on the board who will act as a guide, and assure clients and shareholders that critical functions and strategies will continue," said Harit Shah, IT analyst at Reliance Securities.

Reuters reported earlier this week that a group of 12 major institutional investors in Infosys had called on the company to bring Mr Nilekani back onto the board to help end the feud with the company's founders.

Mr Nilekani and his family own about 2.3 percent of Infosys, and according to Forbes, he is worth $1.72 billion.

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