Infosys former CFO V Balakrishnan has said the company should have increased the size of its buyback plan to boost investor confidence amid the uncertainties at the firm, but maintained that the probe by the US law firms will have no bearing on the offer.
Terming the timing of up to Rs 13,000-crore buyback as "unusual", the former executive said while the pricing of Rs 1,150 apiece is "reasonably good", the board could have been more "forceful" in setting the price target for the buyback.
"They could have done with a larger corpus and maybe price of Rs 1,200 which would create enough confidence for investors," he told PTI.
A day after Vishal Sikka, Infosys first non-founder CEO, resigned, the board of IT giant approved the buyback of 11.3 crore shares at Rs 1,150 apiece. The price was set up at almost 25 per cent premium to the closing price of Rs 923.10 on August 18, the day when Sikka resigned.
"Just announcing a buyback without saying anything when there is a lot of uncertainty like the CEO moving away and the spat with the founders not coming to an end... I think the buyback somewhere loses its sheen," Balakrishnan said.
He plans to participate in the buyback programme as well.
Asked if the response to buyback offer would be impacted by the ongoing investigations by four law firms in the US, Balakrishnan answered in the negative.
He said the law firms are investigating whether they can file a class action suit and have to undergo the stipulated processes and find support before proceeding with any lawsuit.
Sikka resigned last week citing slander by founders. The board, which has blamed co-founder Narayana Murthy for the CEO's resignation, has said it will find a replacement latest by March 31, 2018.
Balakrishnan, whose views mirror those of Murthy, has also demanded that chairman and co-chair as also heads of the audit and remuneration committees step down to address charges of corporate governance lapses.
He stressed that the reconstitution of the board is a must before the company commences its search for a new CEO.
Interestingly, Omkar Goswami, a former member of the Infosys board (2000-15), has written a public letter in an economic daily suggesting that Murthy should walk away before further destroying his reputation and debilitating Infosys.
"Your actions have de facto created a crisis that has forced the exit of a CEO, led to a stupendous 9.6 per cent drop in the share price, and a loss in market capitalisation of over Rs 22,600 crore in one trading day, and initiated the process of class-action suits in the US," he wrote.