UB Pravin Rao has been appointed as interim-managing director and chief executive of Infosys. The company said it has appointed Vishal Sikka as the executive vice-chairman.
Vishal Sikka resigned as Infosys CEO on Friday, citing a stream of “unrelenting” and “increasingly personal attacks” in recent months, a surprise move that sent the IT major’s shares plummeting more than 12%.
B Pravin Rao, Infosys’ chief operating officer, was named interim chief executive. Rao will report to Sikka, who will take the executive vice chairman role until a permanent CEO takes charge, which should be no later than end-March 2018, Infosys said in a statement.
Though Sikka, 50, did not name anybody in a parting letter to Infosys employees, the board said company founder NR Narayana Murthy’s “continuous assault and misguided campaign” was main reason behind the exit.
The resignation came a day after it emerged that Murthy had expressed doubts over Sikka’s ability to lead the company, India’s number 2 software services exporter.
Murthy said he had been told by at least three independent directors of the company that Sikka was more chief technology officer (CTO) material than CE0 material.
Murthy had also publicly lambasted Infosys in the past six to seven months for alleged lapses in corporate governance, allegations the company has denied repeatedly.
Sikka, known for his black T-shirts in contrast to his suit-clad peers, suceeded Murthy as Infosys head three years ago, the the first non-founder to head the software giant.
“…I have decided to leave because the distractions, the very public noise around us, have created an untenable atmosphere. I deeply believe in creating value in an atmosphere of freedom, trust and empowerment,” Sikka said in his letter which he also posted on his blog.
“…I cannot carry out my job as CEO and continue to create value, while also constantly defending against unrelenting, baseless/malicious and increasingly personal attacks,” added Sikka, a former member of the executive board at German software firm SAP.
In a scathing six-page letter to stock exchanges, the Infosys board referred to Murthy’s “latest letter” and said his “campaign against the board and the company has had the unfortunate effect to undermine the company’s efforts to transform itself”.
The board believed it should set the record straight on the false and misleading charges made by Murthy because the founder’s actions and demands are damaging the company, it added.
The shake-up came amid a protracted war of words between the company and its founders and some former executives, who were unhappy with various decisions taken by the board.
The founders, who still own 12.75 percent of the firm, had questioned a pay rise granted to Sikka and the size of severance payouts given to others, including its former finance head Rajiv Bansal.
Why Vishal Sikka resigned as Infosys CEO
Vishal Sikka about resigning as Infosys CEO said to the board, “Over the last many months and quarters, we have all been besieged by false, baseless, malicious and increasingly personal attacks. The distractions that we have seen, the constant drumbeat of the same issues over and over again, while ignoring and undermining the good work that has been done, take the excitement and passion out of this amazing journey.” In a statement, Infosys said, “The board understands and ack reasons for resignation, and regrets his decision. In particular, is profoundly distressed by the unfounded personal attacks on the members of our management team that were made in the anonymous letters and have surfaced in recent months. As the board has previously stated, a series of careful investigations found no merit to the unsubstantiated and anonymous allegations that had been asserted. The board denounces the critics who have amplified and sought to further promote demonstrably false allegations which have harmed employee morale and contributed to the loss of the company’s valued CEO.”
Co-founders of Infosys, including N.R. Narayana Murthy, had questioned a pay rise granted to Vishal Sikka and the size of severance payouts given to other executives, including its former finance head Rajiv Bansal. This is among the several decisions that the co-founders and former top executives of the company were unhappy with in Vishal Sikka’s tenure.
Infosys shares declined by more than 7 percent on this surprise announcement. Sensex also fell over 200 points on this news. The company will organize two investor calls at 11am IST and 6pm IST/ 8:30am ET, and will be hosting a press conference at 2pm IST.
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