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Infosys cuts revenue guidance; no wrong in Panaya deal: Nandan Nilekani

In a virtual clean chit to former CEO Vishal Sikka, the board of Infosys, led by chairman Nandan Nilekani, said it has found no wrongdoing in the acquisition of Israeli company Panaya under the leadership of Sikka.

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Infosys Ltd on Tuesday slashed the revenue guidance for the current year and reported a net profit of Rs 3,726 crore for the quarter ended September 2017, a rise of 3.4 per cent from Rs 3,606 crore in the same period of last year. The net profit was higher by seven per cent from the June 2017 quarter.

In a virtual clean chit to former CEO Vishal Sikka, the board of Infosys, led by chairman Nandan Nilekani, said it has found no wrongdoing in the acquisition of Israeli company Panaya under the leadership of Sikka, following a review of an investigation. The company lowered its revenues guideline for the current fiscal year and attributed it to the reading of the IT market by its management leadership. It has projected revenues to grow at the rate of 5.5 per cent to 6.5 per cent in constant currency which is lowering of projection from the 6.5 per cent to 8.5 per cent that was put out at the end of June.

Nilekani also ruled out the possibility of putting entire report of the probe into the Panaya deal in the public domain although this was one key demands made earlier by the founder shareholder group led by N R Narayana Murthy. The issue of Panaya acquisition had created a rift between the management of the company and the group of founder shareholders, leading eventually to the exit of Sikka and former chairman R Seshasayee in August. “The review reaffirmed the conclusion of the independent investigation that there was no merit to the allegations of wrongdoing with respect to the acquisition of Panaya,’’ Nilekani said. “I believe that all stakeholders acted out of a strong passion for Infosys’’ he said.

“We have brought stability. Our goal was to make ourselves boring. We have got out of the headlines and the Bigg Boss kind of stuff. It is no longer reality TV. We are doing good old fashioned business…’’ he added.

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Disappointed, says Murthy

Bengaluru: Infosys co-founder N R Narayana Murthy, in a statement issued late on Tuesday, said that he stands by every question he has raised on governance issues in the company.

“I stand by every question on poor governance raised in my speech to Infosys investors dated August 29, 2017. The fact remains that none of these questions have been answered by the Infosys board with the transparency it deserves. I am disappointed,’’ Murthy said.

“The core question still is how and why the Infosys board approved an unusual and unprecedented severance payment agreement of 1,000 per cent (of the standard Infosys employment contracts) to the former CFO, and why the board did not disclose this information proactively and much earlier. Sadly, it appears we will no longer know the truth,” he said. Murthy has in the past raised concerns about Rs 17.38 crore severance package awarded in 2015 to release former CFO Rajiv Bansal from the firm amid rumours of wrong doing in the Panaya deal. On Tuesday Infosys Ltd had stated that “the severance payments to the company’s former CFO could have been better handled’’ and that the firm had identified corrective measures. ENS

First published on: 25-10-2017 at 05:40:17 am
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