Infosys Chief Quits After Battle With Founders


Established in 1981 by seven engineers armed with just $250, Infosys now has approximately 200,000 employees and reported revenue of $2.6 billion in the three months through June.

It has steadily expanded by offering software outsourcing services, arguing that it saves money for major companies and allows them to operate more efficiently. The majority of its revenue now comes from the United States, where Mr. Sikka pledged this year to hire 10,000 American employees. (The New York Times is also among the company’s clients.)

Mr. Sikka was credited with helping bolster the company’s revenue, sending its shares sharply higher. But he nevertheless found himself criticized by the founders of Infosys, including Narayana Murthy, a longtime former chairman and chief executive, particularly over levels of executive pay.

That criticism came to a head on Friday, when Mr. Sikka suddenly announced he was resigning. In a letter published by Infosys, he complained of a relentless string of attacks, which he said were “repeatedly proven false and baseless.”

“This continuous drumbeat of distractions and negativity over the last several months/quarters inhibits our ability to make positive change and stay focused on value creation,” he wrote.

He came to the conclusion “that it is indeed time for me to leave.”

Mr. Sikka will stay on as executive vice chairman, and the company’s chief operating officer U. B. Pravin Rao will take over as interim chief executive. Infosys said it planned to have a new chief executive in place by the end of March.

“This is purely a case of founders going for overkill,” said Manoj Kumar, a managing partner at the corporate law firm Hammurabi & Solomon, which is based in Delhi. “Shareholder value will definitely be impacted in the short term, as well as the long term.”

Infosys paid tribute to Mr. Sikka, saying he helped grow the company and establish “breakthrough new programs.” In a statement, the company’s board said it was “profoundly distressed by the unfounded personal attacks on the members of our management team” which it said “harmed employee morale and contributed to the loss of the company’s valued C.E.O.”

The company’s shares fell nearly 10 percent in Mumbai after the announcement of his resignation.

Mr. Murthy, however, offered no such tributes. He said in a statement that he was concerned by the “deteriorating standard of corporate governance” at Infosys, adding: “It is below my dignity to respond to such baseless insinuations.”

Mr. Sikka’s resignation mirrors the struggle over control of the Tata Group.

In that case, the conglomerate’s patriarch Ratan Tata, an Indian corporate titan, clashed with his chosen successor, Cyrus Mistry. Mr. Tata ousted Mr. Mistry in October, starting a nasty public battle in which the company found itself defending against accusations of wrongdoing. The fight between the two sides has rumbled on in recent months, with Indian media reporting that the Tata Group had moved to cut ties with companies controlled by Mr. Mistry.

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