The former Infy Board member was responding to Oppenheimer’s fund manager’s letter that called on the Board to “clarify the role of non-executive founders”
As the boardroom battle at the second largest information technology (IT) services company Infosys intensified, its investors came out in open on which side they supported.
Even as Justin Leverenz, portfolio manager of Oppenheimer Developing Markets Fund whose current collective investments in Infosys was approximately 2.7% at $923 million, on Friday wrote an open letter in support of Infosys Board members, particularly it’s CEO Vishal Sikka, the former chief financial officer (CFO) Mohandas Pail, put his might behind the founders who have alleged governance issues plaguing the Bangalore-based $10-billion company.
Pai told DNA over the phone that founders, including Narayana Murthy, Nandan Nilekani, Kris Gopalakrishnan and others were in a strong position with a 13% shareholding and had every right to question the Board on serious governance and disclosure issues.
Hitting back at Leverenz, the outspoken ex-CFO of Infy said; “who has spoken on behalf of the Board, only one person from Singapore who happens to be a friend of somebody so he has spoken. And, he has made some very silly statement that founders should not interfere. He forgets founders own 13% and they have every right to ask (questions on governance and disclosure issues to the Board)”.
A strongly-worded note put out by Oppenheimer’s Leverenz said; “we encourage the Board of Directors to reaffirm support for Dr. Sikka's authority to execute while discouraging internal dissonance. After many years of organizational chaos, it is time for the Board to get behind their designated CEO and let him execute”.
It further added; “with all deference to their enormous contributions, we also believe that non-executive founders need to come to grips with the reality that this is a public company. It is no longer their firm. As of December 31, 2016, the non-executive founders (promoter and promoter group) owned 12.8% of the company’s outstanding shares. Furthermore, it was reported that they sold 7.5 million shares in March 2016. The Board needs to clarify the appropriate role of non-executive founders of the company”.
Pai advised the Board to talk to the founders and “settle issues”. He backed Murthy’s suggestion of replacing the Board chairman R Seshasayee but said it would finally be shareholders’ decision.
“It is for the shareholders to decide (who will be the Board chairman). Public opinion in favour of Narayana Murthy. I hope the financial institutions support Narayana Murthy,” he said.
Pai said Infosys episode was different from Tata crisis in that “founders were not looking to come back and asserting their control”.
On being asked whether he would return to Board if asked, he said; “No, (I will not return). I have no vested interest and no longing to come back. I am enjoying what I am doing so much I don’t want to go back. That part of my life is over. I am only an investor in Infosys. I am talking of my right as a shareholder”.
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