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Governance First, a grouping of former Infosys employees, has written to the company’s board, saying that they as shareholders wanted transparency from the company on the issues raised by co-founder N R Narayana Murthy. Among the members is Sharad Hegde, Infosys’ first employee who had rejected an offer from Murthy to be a co-founder as he wanted to do a masters course.
“We were shocked by the tone of the letter by the Infosys board to Murthy. We have worked with him; the only thing he is asking them is to back the claims with data,” says George Varghese, who worked with Infosys for over 14 years and now runs his own software services firm.”
Here is the full text of Governance First’s letter to the Infosys board:
We, a group of ex-Infoscions want to express our deep disappointment and anguish at the manner in which the Board has responded to Mr. Murthy in the form of a letter last week to stock exchanges. We have worked closely with Mr. Murthy for many many years, representing a 1000 years of collective experience at Infosys - and believe the only thing he is and has always been concerned with is the good of Infosys. Everything he has stated is to help Infosys be a beacon among Indian companies as far as performance and being a role model company in corporate governance. Longevity of the organization, has been his ambition and driving force, founded on the cornerstone of a strong value system.
Infosys is an extraordinary company by any standards. It was founded by a set of middle-class people who put in lots of hard work, made huge personal sacrifices (some of us have seen those sacrifices at close quarters) and put their heart and soul into it. They built the company on the core values of integrity and transparency, fairness in every transaction, respect for all stakeholders, operating with highest levels of corporate governance, excellence in execution and above all, leading by example. Due to these core values, Infosys was able to attract some of the best talent in the industry and thereby become a successful globally-respected organization.. These values were never compromised and acted as a guiding light when difficult situations needed to be dealt with from time to time.
Dissent was not just tolerated, but even encouraged, as long as it remained within the boundary of the transaction under discussion, and did not become personal. “Disagree, but not be Disagreeable” was the overarching motto of any inter-personal dealing. No one, not even the founders or other key management personnel were allowed to transgress the boundaries of Infosys values. And it is these values we all imbibed as we grew up in such a unique environment. “How” was more important than “what”, and “who” was incidental.
The founders left voluntarily in 2014 after appointing a professional CEO and Board. The founder directors who were at the helm in 2014 left together in October 2014 to provide a free hand to the CEO and the Board to run the company. They left the company when the company had a market cap of $35 bn and a cash position of $5 bn. This is not a mean achievement by any yardstick. To hold that against him today by labelling him as just another shareholder is akin to undermining the roots of the trees one is sitting under.
As we all know, the founders and specifically Mr. Murthy have raised a few very pertinent questions about Corporate Governance concerning certain transactions by the company, such as the Panaya acquisition, concerns regarding severance packages, and other issues. We understand that the current Board made various attempts to reach out to founders and specifically Mr. Murthy about some M&A deals, as well as the severance and other issues. We also understand that there were steps taken including engaging reputed global law firms to investigate any irregularities. We understand that the law firm has completed their due diligence and given a clean chit to all the concerned employees. However, since no details have been shared with retail investors (which includes some ex-Infoscions) about the findings, as well as about how the law firm came to the conclusion that there were no irregularities, it is difficult for us to be convinced either way (whether there were irregularities or not). The message we seem to be getting is: “Trust us; we have done thorough due diligence and a global law firm has done the necessary due diligence and so believe us”. However, we are used to data and disclosures speaking for themselves – that is the culture Mr. Murthy had built and made us all believe is essential – “In God we trust; everyone else brings data to the table” used to be our adage in everything we did, and there were no exceptions!
Given this background, all the issues raised by Mr. Murthy deserve a data-oriented response from the Board with fact based explanations. As a person with not very insignificant shareholding and with a significant emotional investment, he has every right to seek answers and ask for higher levels of disclosure to ensure Infosys continues to have the highest standards of corporate governance, just as it had been for nearly 25 years since Infosys went public in 1993. In this context, we believe the tone and tenor of the Board’s letter is totally contemptuous to Mr. Murthy...
We, ex-Infoscions (many of us are shareholders as well), are as disturbed as Mr. Murthy by these specific insufficient disclosures and seek clear answers from the Board so that we are able to trust the Board. We are no longer employees of Infosys, but we feel extremely proud of the organization and will always remain a part of Infosys that we helped build in our own small ways, under the exceptional leadership of Mr. NRN Murthy
Mr. Murthy had asked several questions which are still unanswered by the Board. The former CEO Mr. Vishal Sikka has resigned citing distractions and noise. However, we believe this could also have been due to the Board not providing detailed facts and explanations in a timely manner which probably led to such ‘distractions and noise’. For the Board to accuse Mr. Murthy as the primary or even the only reason for the distraction and noise is highly unfair and unacceptable. The Board needs to explain in depth, backed by facts and data, the issues raised by Mr Murthy, and come clean to all stakeholders.
In summary we, ex-Infoscions, who still take lot of pride in Infosys and its values, would like the Board to address the issues raised by Mr. Murthy with facts and immediately withdraw the statement released to the stock exchanges which unfairly and unjustifiably blames Mr. Murthy for the current crisis.
Under normal circumstances we would not have written such a letter, but these are extraordinary circumstances warranting our candid feedback to the Board.
Hope you will consider that what we have stated herein isin the overall interests of the company and to ensure the longevity of this esteemed organisation.
Thanks and regards
Amarnath k n
Jayashree M M
Krishnamurthy T S
Madhu Krishna Rao B
N R Sridhara
N S Nagaraj
Pranav N Rao
Sudhir Gurudatta pai
Suryaprakash K S
Vijayanandam V M
Ajith Nair-not a shareholder
Raghuveer B K
Ramesh H P
Madhu Krishna Iyengar
Kiran Babu Sirurmath
Sheeja Cassius Fernandez
Sachin S Kulkarni