Narayana Murthy ‘Disappointed’ After Nilekani Finds No Wrong in Panaya Deal

Infosys chairman Nandan Nilekani validates previous board’s stand on Panaya deal and severance pay after conducting a review of investigations.


Infosys co-founder Narayana Murthy expressed disappointment on Oct. 24 after the company’s board led by Nandan Nilekani refused his demand that the investigation report into Panaya’s acquisition and the severance payout to former CFO Rajiv Bansal be made public.

“I stand by every question on poor governance raised in my speech to Infosys investors dated August 29, 2017,” Murthy said in an e-mailed statement quoted by the Hindu. “The fact remains that none of these questions have been answered by the Infosys board by the transparency it deserves.”

“I am disappointed,” he said. “The core question is how and why the Infosys board approved an unusual and unprecedented severance payment agreement of 1,000% (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.”

Nilekani Finds No Wrongdoing

According to a statement released by the IT major, Nilekani did a review of all external investigations and found no merit to allegations of any wrongdoing. This was a stand maintained by company’s co-chairs R Seshasayee and Ravi Venkatesan before their exits from Infosys in August this year, shortly after CEO Vishal Sikka stepped down.

When asked whether this meant a clean slate for the previous board members, Nilekani said he is looking at future challenges, the Times of India reported. “I’ve come here to look at the future, and our commitment is that we have to do a lot of things because finally it is about execution, it’s about making it happen at scale, getting the entire company transformed. That’s the challenge and that is what we are focusing on,” the newspaper quoted him as saying.

Infosys Statement

The company’s statement was not too different from what its previous board had said. The statement reads: “After careful reconsideration, the company has concluded that publishing additional details of the investigation would inhibit the company’s ability to conduct effective investigations into any matter in the future. Confidentiality is critical to ensuring the candour and cooperation of whistleblowers and other participants in any investigative process.

“The precedent of releasing the full investigation reports could impair the cooperation of participants, should the need for an investigation arise in the future.”

The company also emphasized that the investigators Gibson, Dunn & Crutcher and Control Risks had no relationship with Infosys prior to the investigation. The statement says: “Gibson Dunn’s investigation was led by Charles Stevens and Benjamin Wagner, both Presidentially appointed former senior prosecutors in the US department of justice, each with several decades of experience in investigating and prosecuting fraud and business crimes.”

The statement adds: “The investigation involved interviews of over 50 witnesses globally , a review of company policies, board minutes, public filings and internal documents, the collection, search and review by Gibson Dunn attorneys of many thousands of internal emails and attachments, the use of forensic accounting experts to analyse technical and financial information, the review of media accounts and public records in multiple countries, the review of the previous investigation reports is sued by CAM (law firm Cyril Amarchand Mangaldas) and supporting documentation, and other investigative measures. No limitations or restrictions were placed on the investigating team from accessing information, and the company and the relevant directors and employees cooperated fully.”

Seshasayee Responds

The latest development is seen as a setback to Murthy’s campaign against how the previous board under the leadership of R Seshasayee and management under the then CEO Vishal Sikka had handled the Bansal and Panaya issues. Murthy had called the Bansal payout “hush money”.

These charges led to a massive upheaval in the Infosys top brass, ending with the exit of Seshasayee, Sikka and Ravi Venkatesan in August, and the return of Nilekani as chairman.

Former chairman R Seshasayee responded to the developments on Oct. 24 by wishing the company all the best and saying, “The company now deserves a period of stability and undistracted focus on the business.”

According to Infosys , the process of finding a new CEO has started. “I would also like to acknowledge the leadership role Narayana Murthy has played in building this iconic institution and in corporate governance matters. Going forward, it is our endeavor to build a trusting relationship with Murthy,” Nilekani said, the Economic Times reported.

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