In a move that might add to Infosys' woes, M D Ranganath, a company veteran who is currently its chief financial officer (CFO), has decided to leave the IT major to pursue external opportunities.
In a release on Saturday, Infosys said that the board of directors has accepted his resignation, and the company will immediately commence the search for the next CFO. The company also said that Ranganath will continue in his current position till November 16, which will ensure smooth transitioning of role to his successor.
"Over the past 18 years, Ranga has played a pivotal role in the growth and success of Infosys," said Infosys chairman Nandan Nilekani. "With Ranga as CFO, the company has in the past 3 crucial years, delivered a strong and resilient financial performance on multiple fronts, implemented an efficient capital allocation policy and earned the respect of all stakeholders through enhanced value creation. On behalf of the board, I thank Ranga for his excellent contribution to the company and wish him all the very best in his endeavours," he added.
This is the second CFO-level exit at Infosys within a span of three years. In October 2015, the company's then CFO Rajiv Bansal had quit owing to differences with the management team over the acquisition of Panaya. He was to be paid a hefty severance package of Rs 174 million by the previous board of Infosys under the chairmanship of R Seshasayee. This unprecedented level of severance payout of close to 30 months of salary sparked a huge controversy, with founders like N R Narayana Murthy raising questions on corporate governance issues. This had led to the halting of the assured payout after an initial payment of Rs 50 million. Currently, the case is under arbitration over the remaining amount.
Ranganath, who has been with Infosys for the past 18 years, was one of the key executives who played a vital role in the period of turbulence in 2013, which forced Murthy to return to the IT major as the executive chairman. Ranganath was part of a four-member team in the chairman's office that was responsible for driving cost optimisation, managing top clients and global delivery, among other things. He was also instrumental in managing the transition period when Vishal Sikka took over as the new CEO in mid-2014. An MTech in Mechanical Engineering from IIT-Madras and MBA in Finance & Strategy from IIM-Ahmedabad, Ranganath took over the charge of the CFO in October 2015.
"His departure is an irreplaceable loss for Infosys at this critical juncture," said Murthy, who had hired Ranganath back in 2000 when the latter was with ICICI Bank as a senior vice-president.
"Ranganath's ability to take tough decisions in challenging situations, his solid financial expertise, strong value system, unfailing courtesy and flawless execution always distinguished him as an exemplary leader and a key asset for the company. He is a rare individual who understands all important stakeholders -- clients, delivery teams, employee aspirations, finance, investors, governance, the law, and the role of an ethical business in building a better society. He is everything the idea of Infosys has always stood for," Murthy added.
Ranganath's exit comes at a time when the Bengaluru-based company is fighting battles on several fronts, including bringing back stability at the top under a new CEO who has joined in January this year. The attrition rate is at an all-time high while the company is already engaged in firefighting to bring back investors' confidence following allegations of corporate governance issues under erstwhile CEO Vishal Sikka, especially over the controversial acquisition of Israeli automation software company Panaya and the high severance money payout to Bansal. The incidents resulted in the exit of Sikka, followed by non-executive chairman Seshasayee, forcing Nilekani to return to the company as the non-executive chairman.
"I am grateful to Infosys for giving me the opportunity of serving as CFO of this global iconic company," said Ranganath in a statement. "I am proud that over the last 3 years, during a critical phase of the company, we delivered strong and consistent financial outcomes, maintained high standards of financial reporting, built a world-class finance team, further strengthened the company’s competitive position and thereby enhanced value to the stakeholders," he added.
After the new CEO Salil Parekh, who joined the company from Capgemini, took over in January this year, the company has seen at least three top-level exits, including Rajesh Krishnamurthy, a president who was in charge of the energy, utilities and telecommunications business, and Sangita Singh, an executive vice-president who was in charge of the healthcare vertical globally. The company also saw the exit of Nitesh Banga, a senior VP who was heading the manufacturing vertical and edge products for the company globally.