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The five promoters of Infosys may not be on the same page when it comes to taking key decisions. The three key resolutions, presented by the company in the past three years, have seen less than a fourth of promoters vote being cast, while 75 per cent promoters’ abstained. The instances include appointment of Punita Sinha as independent director, reappointment of Vishal Sikka as managing director (MD) and chief executive officer (CEO) and revision of remuneration package of Chief Operating Officer (COO) U B Pravin Rao. Founder N Narayana Murthy has been vocal on all the three issues.
“The voting pattern of promoters’ shares in resolutions presented by the company over the past 36 months is unmistakable evidence of an internal difference of opinion,” says Institutional Investor Advisory Services (IiAS), in a note tiled ‘Who does Narayana Murthy speak for?’
The proxy advisory and governance firm has analysed the voting pattern on all the resolutions presented by the company since July 2014.
The total promoter shareholding in Infosys is 12.74 per cent. Of which Murthy and S Gopalakrishnan hold at most at 3.44 per cent and 3.19 per cent, respectively. Nandan Nilekani owns 2.29 per cent and K Dinesh and Shibulal hold little less than two per cent each.
Experts say the difference of opinion within the promoter group could complicate matters for Infosys, which may soon present key resolutions such as appointment of new MD & CEO or even reshuffling of the board.
Even recent voting pattern suggest “discernible shift in the voting with some promoters” says IiAS report.
“By the June 2017 Annual General Meeting, there was frostiness over the handling of Rajeev Bansal’s severance package and the allegations regarding the Panaya acquisition. This lead to a discernible shift in the voting with some (not all) promoters: The founders held back from supporting the management on some routine matters. This saw a 42.5 per cent of the founders abstaining. Conversely, the remaining 57.5 per cent of the founders’ vote was cast in favour of the resolutions put to vote: these were the approval of accounts, payment of dividend, reappointment of U B Pravin Rao, the appointment of Deloitte as auditors and to give power to the board to appoint branch auditors,” says the note.
“In case they (promoters) do not acquiesce with what the management proposes, they express their unhappiness by abstaining,” the note adds.