Infosys has absolved itself of any wrongdoing with regard to the controversial Panaya deal as well as severance pay to its former CFO, virtually dismissing co-founder NR Narayana Murthy’s allegations against the company.

Murthy responded on Tuesday to say he was “disappointed” by the development.

The IT major said that after a “careful consideration led by our Chairman, Nandan Nilekani, the Board reaffirms the previous findings of external investigations that there is no merit to the allegations of wrongdoing.”

The review also confirmed that the company made appropriate and timely disclosures relating to severance payments to the former CFO though it admitted that this issue could have been better handled . The company, however, softened the blow by acknowledging Murthy’s leadership role in building the company and in corporate governance issues. “Going forward, it is our endeavour to build a trusting relationship with Murthy,” Nilekani said.

Murthy ‘disappointed’ That endeavour may prove somewhat difficult, going by a statement from Murthy on Tuesday, in which he said: “I stand by every question on poor governance raised in my speech to Infosys investors dated August 29... None of these questions have been answered by the... board with the transparency it deserves. I am disappointed. The core question still is how and why the Infosys board approved an unusual and unprecedented severance payment agreement of 1000% (of the standard Infosys employment contracts) to the former CFO, and why the board did not disclose this information proactively... Sadly, it appears we will no longer know the truth.”

Following the allegations made by Murthy, co-chairmen R Seshasayee and Ravi Venkatesan were forced to step down while CEO Vishal Sikka resigned from his post in August blaming a “continuous drumbeat of distractions” and a long-running row with the founders over the company’s strategy. The board had at that time said that Murthy’s continuous assault was the main reason for Sikka’s resignation.

Mohandas Pai, a former director on the Infosys board, told BusinessLine he was saddened by the developments. “Very sad (to know of the developments). The same board, which covered up earlier, remains. So what can one expect? That they will admit they were wrong?” he asked. One needs to wait longer to see how developments will pan out, he added.

“The company now deserves a period of stability and undistracted focus on the business. I wish the company all the best,” said R Seshasayee, former chairman of Infosys.

Nilekani also said that more details about the probe report will not be made public because of confidentiality issues. Murthy had demanded that the report be made public.

The IT major, which also announced its second-quarter numbers, posted revenues in line with analyst expectations, a quarter after Sikka quit, but it reduced its full-year constant currency revenue guidance to 5.5- 6.5 per cent compared with 6.5-8.5 per cent earlier.

Net profit grew 3.4 per cent on a year-on-year basis to ₹3,726 crore while revenues increased 1.5 per cent to ₹17,567 crore for the same period. On a sequential basis, net profit grew 7 per cent while revenues were up 2.9 per cent. Infosys stocks ended the day at ₹924.35, down 1.61 per cent from Monday’a closing.

UB Pravin Rao, Interim CEO and Managing Director, said the company sees softness in the second half of the year due to holidays and reduced client spending.

In search of a new CEO Nilekani also said the process of identifying the next CEO and the shareholder consultation outreach are progressing well. Search firm Egon Zehnder will work along with Infosys Nominations Committee Kiran Mazumdar Shaw and others to appoint the new CEO.

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