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The battle between the big shareholders and the Infosys board seems to be far from over.
A day after Infosys board Chairman R Seshasayee held a press conference along with CEO Vishal Sikka, some of the company’s large shareholders have asked for current board member DN Prahlad to be made the interim Chairman, so that an impartial enquiry into corporate governance issues can be held. They have also sought recovery of extra severance pay given to former CFO Rajiv Bansal. He has so far been paid ₹5.2 crore of the ₹17.38-crore total payout.
“The press conference didn’t answer any questions which had been raised by the large shareholders. They (board) repeated what they have been saying for the last few days,” a former top executive told BusinessLine .
Another former executive who held a key position in the company said a mail from a whistle-blower should be taken seriously as the person has made some serious allegations against the company. In the press conference, Seshasayee termed the mail malicious and slanderous.
While claiming that the large shareholders, which include all the co-founders, have no issues with Sikka, the executive pointed out that the company is not being run properly. “We are not satisfied (with the way the company is being run). We need to have a good capital allocation policy because the growth rates are coming down. The stock is transforming from a growth stock to a value stock.” He pointed out that keeping 25-30 per cent of the market cap in cash and having 25 per cent to 30 per cent in net income coming from other income, destroys shareholder value.
Some of the large shareholders also said that Infosys should immediately announce a buyback. “How can you have $6 billion cash on a $32-billion market cap. You are not being a software company but a financial services company.” They said a mail was written to the board two years ago about the buyback, but it remained unanswered.
They wanted a $3-billion one-time buyback and on an ongoing basis, at least 80-90 per cent of free cash flow should be returned, they said.
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