Infosys: Narayana Murthy blinks; founders resume talks with board

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Moneycontrol BureauIn what is an indication of a major climb-down in the disagreement between Infosys co-founders and the company's board, NR Narayana Murthy and others have started talking to the company to settle outstanding differences.A Financial Express report this morning, quoting sources, said informal talks have resumed between the company's board and its founders. The move comes days after members of the board indicated they had no intention of letting the issue snowball into a major controversy, and saying any differences between the board and the founders were related to perception and could be resolved.It started when Murthy and other co-founders wrote a letter to the board questioning several recent practices at the board, including the decision to pay a 24-month severance to ex-CFO Rajiv Bansal, a payout very uncharacteristic of the traditionally-conservative Infosys.Reports further said they had questioned the "profligate" lifestyle of Vishal Sikka, even as Murthy went on record saying he had no problem with the CEO.Seperately, ex-CFOs Mohandas Pai and V Balakrishnan have publicly questioned the company's capital allocation strategy, asking why the company is focusing on using its ample cash reserves for acquisitions and not buybacks (a buyback would shore up share prices).But today, CNBC-TV18 also quoted Murthy as saying Infosys Chairman Seshasayee was of the "highest integrity".The subject has caught public attention, coming as it does soon after the Ratan Tata-Cyrus Mistry spat, and had got investors worried that it could tarnish the shiny reputation of a company that used to enjoy as storied a reputation as Tata firms.Yesterday, independent board member Roopa Kudva said that the company has learned from the Rajiv Bansal payout episode and has reworked its contract in each market.

Speaking to Moneycontrol, she said, "If we look back, in hindsight, there have been learnings. We have done benchmarking in each market and reworked contracts for severance pay."

Read more: Board member Roopa Kudva says Infosys reworked contracts post CFO exit