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Murthy, other Infosys founders selling their stake?

Ayan Pramanik / Bengaluru 09 Jun 17 | 10:35 AM

Shares of Information technology (IT) services major Infosys dropped four per cent on Friday when trading opened on the Bombay Stock Exchange (BSE) after reports of its founders, led by N R Narayana Murthy, planning to sell their stake in the company that they founded emerged.

Murthy and the rest of the founders have 12.75 per cent stake in the company, still categorised as promoters in Infosys, which is facing turbulence due to the differences in the functioning of the company between the founders and the management. 

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The Times of India reported on Friday citing unnamed sources that the founders are planning to exit the company by selling their holding. 

"It is not true," Murthy said.

Infosys said the speculation around plans of selling stake had already been categorically denied by the promoters. "The company further reiterates that it has no information on any such development," the company said in a statement.

It further said: "We would like to appeal to the media not to fuel such speculative stories as they are likely to harm the interests of the company and all its stakeholders." 

Infosys stock was trading at Rs 931.0, down 2.64 per cent on BSE at 9.49 am, with the Sensex in the red down by 0.06 per cent at 31,098.88 points.

Infosys Chief Executive Officer Vishal Sikka in a statement to ET Now news channel said he would fully trust any decision that Murthy and founders make, as one of high integrity and driven by a deep sense of purpose and values.

He also maintained that as Murthy had denied this development, it should be put to rest.

"There is too much noise these days and it distracts from the business as we steer it to purposeful growth in an already challenging environment," Sikka wrote.

Murthy and the Infosys board have been at loggerheads since the past year after what he called slippage in corporate governance norms over paying a high severance package to a former Chief Financial Officer Rajiv Bansal.

Since then, Murthy had sought exit of Chairman R Seshasayee, saying that the board had failed in its fiduciary responsibility. Since his outrage, several of his demands have been met.

Infosys made Ravi Venkatesan as a co-chair, appointed D N Prahlad on the board and set up an independent probe on the severance package deal. The company also has appointed Cyril Amarchand Mangaldas to mediate between the founders.

Last year, Infosys slipped on its forecast as Sikka struggles to scale the company's business in the midst of automation, slowing business for traditional services, shift towards digital and growing protectionism. 

Sikka's $20 billion revenue dream by 2020 would also be hit by the slower growth of the firm.

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