SUMMARY* Vishal Sikka resigns as CEO and MD of Infosys of immediate effect
* data-scayt-word="Sikka" data-scayt-lang="en_US">Sikka cited "continuous stream of distractions and disruptions" among reasons for quitting
* Infosys says co-founder Narayana Murthy's campaign against board key reason for Sikka quitting
* Murthy says will he respond to allegations at 'right forum'
* Sikka to stay on at company as Executive Vice-Chairman
* UB Pravin Rao appointed interim MD and CEO
* Infosys stock slips, m-cap falls Rs 22,000 crore
20:18 That's all from our side for now. Stay tuned to Moneycontrol for the latest updates.
19:58 The 'Vishal' Salary
19:47 This is how Twitter reacted to Vishal Sikka's resignation.
19:31 Narayana Murthy is currently at the ET Startup Awards.
19:20 Infosys board has failed to uphold tenets of corporate governance: Mohandas Pai. Read more here.
19:06 Vishal Sikka will not receive severance pay. Read more here.
18:56 A look at all of Infosys' CEOs:
18:40 Despite controversies NR Narayana Murthy has not commented on execution, strategy, the management has said. Don't see anyone beyond the board playing a role in selection of the next leader, it added.
18:35 Here's a timeline of the saga that has played out at Infosys
18:30 Meanwhile, Infosys Founder NR Narayana Murthy is expected to speak at the ET Startup Awards later this evening.
18:25 At this stage we remain optimistic and committed to the guidance mentioned earlier, the management says.
18:20 The new CEO must have a great understanding of Infosys culture, the management says. You have to have a right strategy and implementation, but the leader should be mindful of the culture of the organisation, it adds.
18:17 Infosys investor call has begun. The management says, "Infosys remains a strong brand". The new CEO of Infosys must be a transformational leader, the management says.
17:50 COMMENT: The buyback may keep a rudderless Infosys afloat, but resolving the spat is key. Read more here.
17:36 Here's what fall in Infosys stock means for Mutual fund houses.
17:26 The cumulative notional loss which Narayana Murthy suffered today is a little above Rs 100 crore while other members of the members of the family saw a notional loss of little over Rs 900 crore. Read more here.
17:13 UB Pravin Rao has stepped-in as the interim MD and CEO of Infosys.
Rao holds a bachelor’s degree in Electrical Engineering and is an An alumni of the Bangalore University. Here's all you need to know about him.
16:57 Narayana Murthy had sent a letter to advisors on August 14.
Here's an excerpt from the letter:
"My problem is with governance at Infosys. I believe that the fault lies with the current board. If the board had not made inaction its strategy since September 2015, and had ensured proper governance, then the board could have created checks and balances required in any well-run company. That, alas, does not exist today."
16:50 Sikka’s exit is not only bad for the company but also for India’s information technology sector as a whole. Murthy and co may have driven the final nail into IT’s coffin. Read more here.
16:43 After resigning as Infosys CEO, Vishal Sikka will now take on the role of Executive Vice Chairman at the company. Here is what's next for Sikka.
16:34 Is Vishal Sikka’s exit a nasty hiccup or the beginning of the end for Infosys? The succession will tell. Read more here.
16:27 Experts are calling Sikka's exit unfortunate for Infosys. The stock fall has eroded nearly Rs 27,000 crore in m-cap. Read more here.16:20
The D-Street has been left stunned by Vishal Sikka's sudden exit!
Here's what you should do with the Infosys stock.
16:10 There's a small change in Vishal Sikka's Twitter bio:
15:45 The turn of events at Infosys is expected to cause considerable problems for mutual fund managers, many of whom were betting heavily on the possibility of a turnaround being produced by Vishal Sikka.
Prior to Sikka taking over as CEO, Infosys stock was underperforming while revenue growth had fallen behind peers.
HDFC AMC owns as much as 2 percent in Infosys while ICICI, SBI and Reliance own between 1 and 1.5 percent. Collectively, funds own about Rs 20,000 crore in Infosys shares.
See the full story here.
15.35 The market has now closed, with Infosys falling 9.6 percent, posting its biggest fall in four years. The Nifty fell 0.65 percent, or 66 points, about 51 of which was straight because of the crash in Infosys' shares.
15:25 Even as Narayana Murthy railed against slipping corporate governance standards at Infosys on Vishal Sikka's watch, the stock performance is quite another story.
Not only has Infosys beaten the IT index (22 percent absolute vs 9 percent for the index), it has beaten all three of its peers: TCS (-1.4 percent), Wipro (7.8 percent) and Tech Mahindra (-20.2 percent).
Read the full story here.
15:11 The Infosys management will address a second investor call at 6pm today. The board will also go ahead with a scheduled meeting on Saturday where it will consider a proposal to buy back equity shares.
15:04 With half an hour to go for closing bell, Infosys has trimmed its losses to a 10 percent intraday fall.
15:02 Is Sikka’s exit a nasty hiccup or the beginning of the end for Infy? Moneycontrol's Madhuchanda Dey says the succession will tell. Read the story here.
14:59 Seshasayee sums it up by saying it is legitimate to have concerns about governance, but the company did its job by investigating the claims.
14:48 Seshasayee says the board has investigated allegations with regard to the Panaya acquisition and Rajiv Bansal's severance pay on three occasions and no proof of wrongdoing has been found.
14:46 Seshasayee says the board tried its best to address the concerns of the co-founders, but with limited success.
14:42 There will be no change in buyback plans, says Seshasayee, adding that none of the projects in motion will be stopped.
14:40 Infosys needs a people-oriented person without pre-conceived notions to be its next CEO, says Venkatesan.
14:39 Seshasayee says there is no dissent among Board members.
14:37 Events of the last 48 hours have made it impossible to consider Murthy for a permanent role at Infosys, says Venkatesan.
14:32 Ravi Venkatesan says he is not in contention for MD and CEO's post.
14:28 With regard to Murthy's letter, Venkatesan says comments on Sikka being only 'CTO material' appear to have been taken out of context.
14:26 Infosys Chairman R Seshasayee thanks Vishal Sikka for giving the company a new direction during his tenure.
14:24 Meanwhile, at the press conference, Vishal Sikka guarantees a smooth transition.
14:22 Here is Narayana Murthy's full statement:
I have read the statement issued by the Board of Directors of Infosys
.I am extremely anguished by the allegations, tone and tenor of the statements.
I voluntarily left the Board in 2014 and am not seeking any money, position for children or power. My concern primarily was the deteriorating standard of corporate governance which I have repeatedly brought to the notice of the Infosys
It is below my dignity to respond to such baseless insinuations. However, several shareholders who have read the whistle-blower report have told me that it is hard to believe a report produced by a set of accused, giving a clean chit to the accused, and the accused refusing to disclose why they got a clean chit! They say that this is not the way an impartial and objective investigation should be held.
I will reply to these allegations in the right manner and in the right forum and at the appropriate time
14:20 Murthy said he will reply to the allegations in the "right manner and at the right forum".
14:17 Just before this conference began, Narayana Murthy released a statement saying it his 'below his dignity' to respond to Infosys' accusations.
14:11 Press conference begins. Infosys Co-Chairman Ravi Venkatesan says the board fully understands Sikka's reasons for stepping down.
14:07 What next for Sikka? After his stint as Executive Vice-Chairman ends, he's keen on going surfing.
14:02 The Infosys press conference is expected to start any minute now.
13:45 Missed the Infosys investor call? Here's a lowdown on what Vishal Sikka and other members of the management had to say.
13:31 The Infosys management will hold a press conference in half an hour.
13:20 The Infosys stock has now fallen more than 11 percent intraday, a 52-week low.
13:14 More strong words from that Infosys: "The Board declines to speculate about Mr. Murthy’s motive for carrying out this campaign, including the latest letter. The Board believes it must set the record straight on the false and misleading charges made by Mr. Murthy because his actions and demands are damaging the Company and misrepresent its commitment to good corporate governance."
13:07 Market update: Infosys has fallen 10 percent intraday, contributing 65 percent to the Nifty's losses.
12:59 The Infosys board has pulled no punches: "Mr. Murthy's continuous assault, including this latest letter, is the primary reason that the CEO, Dr. Vishal Sikka, has resigned despite strong Board support."
12:50 A reminder that there will be a press conference at 2pm, followed by another investor call at 6pm.
12:48 Here's the full text of the Infosys board fact checking Narayana Murthy's allegations.
12:41 Infosys has lashed out at Narayana Murthy saying repeated 'assaults’ by the co-founder against the board has led to the resignation of CEO Vishal Sikka.
“Mr. Murthy's continuous assault, including this latest letter, is the primary reason that the CEO, Dr. Vishal Sikka, has resigned despite strong Board support,” a note to the exchanges said.
12:38 Meanwhile, the fall in Infosys' stock has led to a steep fall in the market capitalisation of the company. It fell over Rs 16,600 crore on the back of the fall in the stock.
12:36 The conference call has ended. We're now going to review the Board's comments on Narayana Murthy which it made in a separate press release.
12:31 Ravi Venkatesan says Vishal Sikka has had the full confidence of the board throughout.
12:28 He adds that he has no job lined up, and will take time off and go surfing after a new CEO is chosen.
12:26 "We'll see it how goes," says Sikka when asked if there is a remote possibility of him reconsidering his decision to quit.
12:23 Venkatesan says the company will focus on performance now.
12:20 Ravi Venkatesan says the Board has NO INTENTION of inviting Narayana Murthy to be a part of the formal governance of the company.
12:17 Venkatesan says investor confidence is crucial and the Board is hopeful of being able to stay the course.
12:13 Ravi Venkatesan says the board has engaged with the founders over the past year and thinks it has done everything that is reasonable. "We have reached a situation that is not tenable," he says, adding that the Board's decisions have not gone down well with the founders.
12:10 "This company does an exemplary job of maintaining other people's products, so I am sure we can maintain our own," says Sikka.
12:08 "You hear Panaya in the news for all the wrong reasons [controversy over acquisition], but it is a very integral part of our work," says Sikka.
12:06 "I am still here to guide the change," says Sikka.
12:04 Venkatesan reiterates that the management will work towards achieving "stability" before the next CEO takes over.
12:03 UB Pravin Rao says there will be some disruptions in the short-term and the company will work towards improving communication.
12:02 On choosing the next CEO, Venkatesan says: We have some people coming up inside, but will also look outside.
12:00 "I hope some of the founder-related issues will be put to bed in the interim period so that the next CEO has an easier time." says Infosys co-chairman Ravi Venkatesan.
11:59 Venkatesan says it will be challenging to find the right candidate for CEO.
11:58 In the end the company is bigger and stronger than all of us, the company will live longer than all of us: Sikka
11:56 Sikka says the attacks against him have gotten increasingly "malicious and personal" in recent months. Says the Board asked him to reconsider his decision.
11:54 Interim CEO UB Pravin Rao says there will be extra focus on engagement with stakeholders.
11:51 Sikka says Pravin Rao will continue to report to him as part of the interim management setup.
11:50 "What has been going on since the last 4-5 quarters, especially since February, this continuous drumbeat of these allegations, news stories, the same stuff over Rajiv’s [Bansal] separation, Panaya [acquisition].. it is absolutely sickening," says Sikka.
11:48 Sikka says the "negative environment" led him to introspect. "I just couldn't do it anymore," he says, adding that he is thankful to the Board for appointing him as executive vice-chairman.
11:45 Sikka says headwinds are an exciting challenge, but drumbeat of allegations has been "sickening".
11:44 "Thanks for last three years of really wonderful support and all of your commitment," says Sikka.
11:42 Sikka speaking now. Says he is proud of his team's achievements over the last three years.
11:40 Distressed by continuing allegations against Dr. Sikka and other members of the board, says Venkatesan. He says that all the claims have been proved false.
11:38 Infosys has just issued a fresh press release in which it has said that co-founder Narayana Murthy's campaign against the Board is a key reason for Sikka's resignation.
11:36 Infosys co-chairman Ravi Venkatesan thanks Sikka for making Infosys "relevant again".
11:34 Vishal Sikka will be addressing investors during the call.
11:33 The Infosys investor call has begun.
11:27 With Sikka stepping down as CEO, here's 10 things to know about him.
11:23 Before being appointed interim MD and CEO, UB Pravin Rao was the Chief Operating Officer of Infosys.
11:13 The Infosys investor call has been postponed to 11.30am.
11:08 Here's the crux of Sikka's resignation letter:
"Over the last many months and quarters, we have all been besieged by false, baseless, malicious and increasingly personal attacks. Allegations that have been repeatedly proven false and baseless by multiple, independent investigations. But despite this, the attacks continue, and worse still, amplified by the very people from whom we all expected the most steadfast support in this great transformation.
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. Addressing the noise by itself is damaging; hundreds of hours of my own time has gone into this recently. But the structural challenges this engenders within the organization, has a very damaging effect on our ability to carry out any kind of a transformation, especially one that is as fundamental as transforming from a cost-oriented to an innovationoriented value delivery to clients."
11:05 Meanwhile, the Infosys stock has registered its highest intraday fall since January this year.
11:02 Both Sikka's resignation letter and his email to employees make no mention of Narayana Murthy.
10:54 As the focus will inevitably turn to Narayana Murthy, here's a take on the retired co-founder's relationship with the company: Narayana Murthy should be hands-off at Infosys, because wistfulness is not a wish.
10:47 Last week, Narayana Murthy said he had no intention of returning to Infosys and was only interested in improving corporate governance at the software major.
10:45 In case you're wondering, there has been no reaction yet from Narayana Murthy.
10:40 The company will organise two investor calls at 11am and 6pm today. There will also be a press conference at 2pm.
10:31 Sikka has also tweeted with a simple "Moving on..." followed by a link to his resignation email to employees.
10:27 For live updates on how the Infosys stock is faring, follow our running market blog.
10:24 Ravi Venkatesan, Co-Chairman of the Board, said: "I want to thank Vishal for his commitment to ensure a smooth transition and his commitment to a seamless experience for our clients. Pravin is a veteran Infoscion with deep knowledge of the business, and his long experience in the Company will help ensure a smooth transition."10:20
What will Sikka
do next? Infosys
' filing to the exchanges says he will continue to focus on strategic initiatives, key customer relationships and
10:17 Sikka will receive an annual salary of USD 1 in his role as Executive Vice Chairman. He had earned Rs 45.11 crore in 2016-17.
10:10 The immediate concern for investors is how the stock has reacted. Infosys slipped as much as 7.5 percent in morning trade on Friday. Read the full story here.
10:06 Just last week, activist shareholder Anil Sanghvi had told Moneycontrol that investors were asking if Vishal Sikka was the right person to lead Infosys.
09:59 In an email dated August 9 that was accessed by Mint, Infosys founder Narayana Murthy reportedly wrote to his advisers that "All that I hear from at least three independent directors, including Mr Ravi Venkatesan (co-chairman), are complaints about Dr Sikka. They have told me umpteen times that Dr Sikka is not a CEO material but CTO material."
09:50 In the communication to the exchanges, the Board said it "denounces the critics who have amplified and sought to further promote demonstrably false allegations which have harmed employee morale and contributed to the loss of the Company’s valued CEO."
09:45: Here's the full text of Vishal Sikka's resignation letter to Infosys.
9.35 am: In his resignation letter to the board, Sikka has cited "continuous distraction and disruption" as the reason behind his exit. Excerpt from the letter.
"Dear Board Colleagues,
Over the last few days, since our earlier call, I've met Sesh (Chairman Seshasayee) several times, talked to you individually at length, and spent time thinking things thru with Vandana. During this time, one of our employees, Sandeep Karamongikar, died in his sleep, likely of a massive heart attack. He was working on the chatbot frontend in Nia. Also over the weekend, in possibly the greatest demonstration of AI capability ever, a bot built by the researchers at OpenAI (yes, that OpenAI), defeated the world's best players of DOTA2, a multiplayer online video game, a game where the bot learned to play entirely from scratch. Further demonstrating that the force to automate routine, even advanced, activities is an unstoppable and exponential one. And the Charlottesville incident here in the US demonstrated once again the power of words and silences to cause real damage, or to heal.
After much reflection, I have concluded that it is indeed time for me to leave my current positions as MD and CEO, and I have communicated my resignation to Sesh.
I will be working closely with Sesh, Ravi, Pravin, with all of you, and the senior management team to plan out the details and the timelines to ensure a smooth transition and in the meantime, continue our work without disruption, and ensuring that we protect our company, the employees, the clients, and the interests of every shareholder. You can count on my commitment to this."
9.30 am: Sikka's resignation shouldn't come as a surprise to investors even as the stock has taken a beating. The counter is now down 6.4 percent in early trade even though analysts are cautioning investors to not make a hasty exit.
9.25 am: The company today said the board had "accepted the resignation of Dr Sikka as MD and CEO with immediate effect". It further said that Sikka had been appointed as Executive Vice Chairman. Till a permanent CEO is found, COO Pravin Rao will be the interim CEO and MD.9.15 am:
Vishal Sikka has resigned as MD and CEO, the company has informed exchanges. The development comes after a history of tensions between him and ex-promoters such as Narayana Murthy. Stay posted.