Subsidiaries Panaya and Skava are not for sale, says Infosys CEO

Infosys ’ top executives put shareholders’ concerns about the future of its subsidiaries, Panaya and Skava, to rest saying that they have been taken off the sale list and will now be nurtured and put on a growth path.

The Israeli enterprise software management firm, Panaya, was bought for $200 million in 2015, while the San Francisco-based Skava, which provides a cloud-based platform for online services for retailers, was bought for $120 million.

But soon after their acquisitions, a whistleblower raised concerns about the lack of transparency in the deal. The controversy was one of the main reasons for the exit of CEO Vishal Sikka in 2017.

Process of integration

Responding to shareholders’ queries at the company's 38th Annual General Meeting here on Saturday, Infosys CEO Salil Parekh said, “Panaya and Skava have not been put on sale. We have stated this in our annual report and financial results. We are now looking at how to refocus and repurpose activities within these businesses with a view to growing these acquisitions.”

The decision to take both these subsidiaries off the sale list was first reported by BusinessLine in July 2018.

Also read:‘Fit will drive acquisitions at Infosys’

Parekh who succeeded Sikka said the company had assigned two senior executives who, in addition to their existing role, would monitor the progress of these acquisitions and find ways to integrate them with the company’s other businesses. “The process has already begun. We expect better results in the short- and medium-term,” said Parekh.

‘Closed chapter’

Nandan Nilekani, the company's non-executive Chairman said, “Panaya controversy is a closed chapter for Infosys.''

Nilekani replying to a shareholder’s query on the reasons for not making the Panaya investigation report public, said, “The investigation report on Pananya is a confidential document. People who were part of the investigation were given assurance of confidentiality before their statements were recorded. The board is comfortable with the decision to keep this confidentiality as it is.”

In his address to shareholders, Nilekani said, “We clearly see that our clients operate in an increasingly complex world disrupted by many digital technologies, and they are looking at us to partner with them in this new era. Our work across industries, value chains and geographies give us keen insights into the pattern of changes transforming the fundamental wiring across a diverse set of businesses.”

The IT major also pointed out that it has set up an extensive internal committee that would look at potential acquisitions and also address integration issues around its existing acquisitions.

“There is an increasing interest from clients for platform-based businesses,” the company said, adding that the acquisition of ABN AMRO Bank’s subsidiary Stater, a mortgage platform, was one such step forward towards this direction. “Our BPO and BFSI teams are of the view that such a platform can help us scale up,'' Parekh said.

Low turnout

Interestingly, Infosys AGMs which usually see a record number of participation from shareholders, saw only about 500 of them participating in the annual event.

One of the shareholders during the AGM thanked Nilekani for keeping himself away from entering into politics and wanted him to stay back with Infosys stating that the company will continue to need his leadership for some time to come.

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