Infosys Board to face investors’ heat at AGM

“The Board and top management will face the heat of shareholders, unhappy with the way the company is being run, especially on governance and its performance in 2016-17,” a retail investor said on Friday ahead of the AGM here. 

Coming as it does amid board-room battles between promoters and the board, especially Executive Chairman R Seshasayee and CEO Vishal Sikka on governance and wages, the meet is important in light of the lower revenue outlook for this fiscal (2017-18), tech disruptions and slowdown in the IT industry due to global headwinds. “You can expect fireworks at the meeting from retail and some institutional investors as the company’s image or brand equity took a beating after co-founder NR Narayana Murthy voiced concerns over governance and other issues, which are affecting its operations and business prospects,” said the investor, who did not want to be identified. Declaring financial results for the last fiscal on April 13, the company gave a lower revenue outlook of 6.1-8.1 per cent in dollar terms for 2017-18 from 7.4 per cent ($10.2 billion) annual growth last year. 

In rupee terms, the revenue growth is projected to be 2.5-4.5 per cent as against 9.7 per cent (Rs.68,484 crore) annual growth in last fiscal. The lower guidance stemmed from flat (0.2 per cent) net profit growth and 0.9 per cent revenue growth in the fourth quarter in rupee terms over last year. 

“The bitter fight between the promoters and the board over the last four months has been a major distraction for the company and its stakeholders. There is a trust deficit between the board and promoters and between the top management and employees. The friction will have a bearing on its services and growth prospects,” said another long-term investor, who was also on the board as a director till 2013.

Infy probe concluded :

Two anonymous complaints registered with the market watchdog, SEBI, making allegations relating to the company have gone through a comprehensive investigation process. The anonymous complaints (made on Feb 21 and 22) were placed before the Audit Committee, which approved the comprehensive investigation. Gibson Dunn and Crutcher, LLP, an international law firm recognised for its expertise in conducting internal investigations, and control Risks, a global risk consultancy specialising in expert analysis and in-depth investigations, were retained to conduct the probe.