As the news of Infosys CEO and Managing Director Vishal Sikka’s resignation came in, the benchmark BSE Sensex plunged by 207.75 points or 0.65 per cent to 31,587.71 in early trade trade on Friday. Infosys shares also went down more than 7 per cent in early trading. The shares fell to a more than one-month low of Rs 948.25. At 09:18 am, the Nifty was down 62.20 points at 9841.95.
The development unfolded after a war of words between Infosys and its founders and some former executives who were unhappy with various decisions taken by the board. In his resignation, Sikka stated that constant distractions and disruptions over the recent months and quarters were among the reasons why he chose to step down. Read full text of Vishal Sikka’s resignation letter as CEO, MD of Infosys
The founders had earlier questioned Sikka’s pay rise and the size of severance payouts given to others. The chief operating officer UB Pravin Rao has been named as the interim managing director and chief executive. Sikka was named executive vice-chairman. Who is UB Pravin Rao, interim CEO of Infosys? Read here.
Infosys CEO Vishal Sikka resignation highlights:
3 pm: The press conference has concluded.
2.37 pm: When asked if N Murthy would be considered for an active role, Venkatesan said, events in the last 48 hours has made it difficult. “Some shareholders say it’s hard to believe report by a set of lawyers hired by accused, giving clean chit to the accused. Will reply to allegations in right manner, right forum and at an appropriate time,” Murthy said in a statement released on Friday.
2.35 pm: “Succession planning high on mind of the Board,” said Venkatesan. “Its important that whoever is the next CEO must buy into the vision and strategy of Infosys.” He also said Sikka “excelled” in the matters of connecting with people. “We need someone who doesn’t bring about another cultural change,” adds R Seshasayee.
2.30 pm: “When things don’t go right we blame the leader, when things go right recognition should also go to the leader. The Board supports Vishal. No doubt that he is a phenomenal guy, the world knows it. He has blossomed as a leader,” Independent Director and Co-Chairman Ravi Venkatesan said adding he was not in contention for the top job at Infosys.
2.26 pm: “Anguished by allegations, tone and tenor of statements by Infosys board, below my dignity to respond to baseless insinuations,” says Narayana Murthy.
2.23 pm: The former Infosys CEO has now taken over as executive vice-chairman. He said he would continue “being there” for the company and interim chief executive UB Pravin Rao. “No qualms or thoughts on what I will do next. I’m here till the March 31 next year,” said Sikka. “After discussion, we came to conclusion that I will stay on as executive vice chairman, help in transition and UB Pravin Rao will be interim CEO,” he added.
2.20 pm: “I signed up for disruption. There was continuous allegations and noise over the same things. At some point, you realise its taking a heavy toll on the organisation and personally. And I realised I don’t want to do this anymore,” Sikka added.
2.15 pm: “Really proud of the achievements of Infosys. Be it new services or softwares or innovation at the grassroot levels,” Sikka said.
2.10 pm: Speaking from California, Sikka says, “In many ways its a sad day, but a day that I hope will help clarify and improve things.”
2.00 pm: Infosys press conference following resignation of CEO Vishal Sikka begins. “With incredible sadness, we have accepted the resignation of Vishal Sikka, fully understand his reasons,” Infosys Co-Chairman, R Venkatesan said in the press conference.
11.35 am: His resignation came at a time when Infosys is tackling a slowdown in new deals from western clients and bracing for changes to visa rules in the United States, its top market, that could hike costs and dent profits.
11.30 am : Sikka had earlier been a member of the executive board at German software firm SAP. He become Infosys chief in 2014 becoming the first CEO who was not also one of its founders. Related | Vishal Sikka resigns as MD and CEO of Infosys
11.15 am: “There is some level of uncertainty as we wait till the new CEO and managing director comes in, and it does put the company in some form of uncertainty in terms of strategy,” an analyst at HDFC Securities told Reuters.