Mumbai, August 18: Just a day ahead of its Board meeting to consider a Rs 13,000-crore share buyback proposal, India’s second largest software services firm Infosys saw a major shift in power. Managing Director And CEO of Infosys Dr. Vishal Sikka, who had taken over the reins of Infosys in June 2014, resigned on Friday. U B Pravin Rao, who has been the chief operating officer, has been appointed as the interim MD and CEO of the software giant. Sikka had previously served as Executive Director at the German software major, SAP. The Infosys board of directors accepted his resignation and said Sikka would continue as Executive Vice-chairman.Also Read - Major Indian IT Firms Plan To Hire 450,000 Employees In 2nd Half of FY22 With Focus On Skill Building

The global software major has been battered by allegations of poor corporate governance by Narayana Murthy and the other fellow founders. Infosys co-founder N.R. Narayana Murthy on Friday claimed in an email to some of his advisers that he had been told by at least three independent directors of Infosys that Vishal Sikka was more chief technology officer (CTO) material than chief executive officer (CEO) material. Also Read - Mega Hiring! TCS, Infosys, Wipro, IT Companies Likely To Recruit Over 1 Lakh Freshers This Year

In July 2017, Infosys Co-Chairman Ravi Venkatesan while answering to a query whether the company would prefer to see Murthy as shareholder activist or a well-wisher said that the company certainly would not want to label co-founder and promoter N R Narayana Murthy as a shareholder activist, but consider him a “well-wisher.” Also Read - Work From Home to End Soon: List of Companies That Are Asking Employees to Come Back to Office

Earlier in July, Murthy, who quit as the chairman of Infosys in 2014 opened up about his biggest regrets and said a lot of my founder colleagues told me not to leave Infosys in 2014, to stay a few years. He said he regrets quitting and should have listened to other co-founders of India’s second largest software exporter firm and stayed on. Murthy has publicly lambasted Infosys over the course of the past six-seven months for lapses in corporate governance. These allegations have been repeatedly denied by the company.

Last year, Infosys’s board rewarded Sikka’s with a higher compensation of $11 million a year, up from the earlier $7.08 million. Infosys Ltd’s founders were unhappy with the board’s willingness to be flexible and generous with the variable pay of chief executive officer Vishal Sikka’s $11 million compensation, adding to their long list of grievances.  In February, Vishal Sikka termed Narayana Murthy an “incredible man” and said that he had a “wonderful” relationship with the founders.

Timeline of Infosys:

  • In 1981: The IT major Infosys was set up by N.R. Narayana Murthy and six other engineers in Pune. The initial capital to start the company was $250.
  • In 1983: Infosys relocates corporate headquarters from Pune to Bangalore. Infosys was one of the first software companies to set up operations in Bangalore.
  • In 1993: Infosys was listed on Indian exchanges
  • In 1999: The IT major became the first Indian company to list on Nasdaq
  • In 2002: Narayana Murthy handed over chief executive role to co-founder Nandan Nilekani and became chairman.
  • In 2006: After 25 years, Murthy stepped down as chairman after reaching the company’s retirement age of 60. He, however, continues as non-executive chairman and mentor.
  • In 2014: 33 years after starting Infosys, Murthy bid farewell to Infosys. Murthy was the CEO of Infosys for the longest time of about 21 years. He then passed on the baton to Nandan Nilekani and then S Gopalakrishnan and S D Shibulal.
  • In October 2014, former SAP board member Vishal Sikka took over as CEO.
  • In August 2017, Sikka resigned as the MD and CEO of Infosys and U B Pravin Rao, who has been the chief operating officer, has been appointed as the interim MD and CEO of the software giant. With this recent shift in power, Sikka would continue as Executive Vice-chairman.

In her 1995 book, Claire Barnes indicated on Asian equity markets that a pattern of spikes in Infosys stock pre-results indicated a high probability of insider trading or leaks. Dating back to late nineties, Infosys was embroiled in various controversies. The controversies ranged from the media exposure that their statutory auditors, Bhaktal and Co, were the largest non-promoter, retail shareholders pre-IPO, to the DRI notice sent by an upright IRS officer, Ashish Abrol, on the Yantra divestiture and who was hounded out soon thereafter.

Sikka in his resignation letter to Infosys Board members blamed a ‘continuous stream of distractions and disruptions’ for his decision to quit as Infosys CEO. He informed that these attacks had become increasingly personal and negative. On Friday, the IT major informed in its statement that the Board of Directors has accepted the resignation of Vishal Sikka as the Managing Director and Chief Executive Officer with immediate effect at its meeting held on Friday. “Sikka will continue to focus on strategic initiatives, key customer the relationships and technology development. He will report to the Board,” noted the statement.