Infosys CEO Vishal Sikka safe for now, say fund managers

Vishal Sikka’s position as Infosys CEO appears to be safe for now with fund managers and insurance companies saying that there is no threat to his position, but they hope to see a resolution of differences between promoters and the management. With institutional investors having a benign approach to both, promoters might push for changes on the board.
In Friday’s flat market, the Infosys stock rallied over 2% to close at Rs 968. And in the last one week, the stock has returned 3.5% compared to a 3.8% rise in the BSE’s IT index.
A fund manager with a domestic house said that the questions about corporate governance issues at the company seem to be working in a positive way for Infosys.
“This will force the board members to think how to avoid such issues. In future, they will be very cautious,” the fund manager said. According to this fund manager, the Infosys affair will also put a lot of other boards on notice and they will probably take a leaf out of this case to avoid such issues in their companies.
Sources in LIC said that the corporation would continue to follow its stance of not interfering in the running of a company. However, they were hopeful that differences between promoters and management are resolved as this would be in the best interest of shareholders.
“Sikka was appointed by the board and approved by a majority of shareholders. His compensation package was also approved as per the law. The severance package of Rajiv Bansal (former CFO) was also approved as per the law. Everything is above board. So what governance issue are the promoters talking about?” asked one of the top fund managers in the country.
However, all the fund managers said that they were unable to understand why N R Narayana Murthy chose to come out in the open now. Instead they feel the company’s AGM should have been the right time to speak about this.
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