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    Nandan Nilekani, the man behind UID wooed to settle unique Infosys row

    Synopsis

    Separately, top executives of 12 large mutual funds and insurers have written to Infosys’ board, asking that Nilekani be invited to join the board in a “suitable capacity”.

    ET Bureau
    MUMBAI | BENGALURU: Nandan Nilekani, the celebrated cofounder and former CEO of Infosys, is being vigorously wooed by a plethora of bankers and investors as well as the board of the marquee technology outsourcing firm to return and quell the ongoing management turmoil in the company, following the shock exit of its CEO Vishal Sikka last week.

    Nilekani, who left Infosys in a blaze of glory a decade ago to create a system of unique identification numbers for all Indians, is unlikely to accept the position of chief executive but may be persuaded to take on the role of a non-executive chairman or an ‘adviser’, said three people aware of the intense efforts underway to convince him.

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    Separately, top executives of 12 large mutual funds and insurers have written to Infosys’ board, asking that Nilekani be invited to join the board in a “suitable capacity”.

    “It is a frantic situation. Calls are being made, all focused on bringing Nandan (Nilekani) in.

    Image article boday


    He has been reluctant to return in the past, but now he is thinking about it,” an Infosys executive with knowledge of the board’s deliberations told ET.

    The crisis has come in the wake of strident charges of “poor corporate governance” levelled by cofounder NR Narayana Murthy against the company.

    He has been vocal in his demand for a recast of the board.

    A person familiar with Nilekani’s thinking told ET he only wants to help out and may not look at a long-term tenure. “Some of the biggest domestic institutions have advised the board to persuade him to protect Infosys from a sharp downward slide,” the official said.

    The Aadhaar architect was supposed to travel to the US on Wednesday, but has stayed back, two executives told ET. Nilekani did not reply to emails seeking comment.

    A representative for Infosys said, “The company does not have any further updates to share at this point of time. In case there are any developments we will inform the media in due course. We will not be making any comments on speculation and rumours.”

    A person closely aware of the ongoing talks said the final strategy is still being worked out. “Nilekani is being asked in what capacity he can help the board. How the board will be reconstituted is a future course of action,” said a person close to the board.

    On Wednesday, ET Now reported that four board members — R Seshasayee, Ravi Venkatesan, Roopa Kudva and Jeffrey Lehman — could step down as part of a restructuring.

    FAVOURED BY ALL STAKEHOLDERS
    Nilekani, 62, is regarded as the person most favoured by all stakeholders — the founders, board, institutional investors and the management of the company, which has been roiled by turmoil since Murthy publicly demanded in February that the board clarify the terms of severance package for former CFO Rajiv Bansal and the acquisition of Israeli software firm Panaya.

    ET had reported on Wednesday that Nilekani was making calls in an attempt to defuse the standoff between Murthy and the company’s board. He has been approached by both sides — the board as well as Murthy, an Infosys official told ET. “It is clear if he agrees it will be in a non-executive role or an advisory capacity,” said the official with direct knowledge of talks.

    “Nilekani is seen as a sane voice who will be able to connect with the board as well as Murthy. He has been in all top roles, including vice-chairman, and he has been focused on bigger issues outside the company,” the official added.

    The move to persuade Nilekani to return is believed to have the blessings of Murthy. Former Infosys board member and CFO V Balakrishnan, who is widely regarded as a confidant of the septuagenarian founder, told ET, “We need somebody who will come and stabilise the ship and remove the uncertainty, and get the show going.

    If Nandan comes as a chairman, things will settle down and client confidence will be high. He is a global face and he is well-connected to clients.”

    The investors who signed the formal letter addressed to chairman R Seshasayee and co-chairman Ravi Venkatesan seeking Nilekani’s return include S Naren, chief investment officer of ICICI Prudential Asset Management; Prashant Jain, CIO of HDFC AMC; Mahesh Patil, co-CIO of Birla Sun Life AMC; Navneet Munot, CIO of SBI Funds Management and Nilesh Shah, CEO of Kotak Mahindra AMC.

    RESTORING CONFIDENCE
    “Given his credentials, we feel that his joining the board at this stage will restore confidence of stakeholders in the company and also facilitate resolution of the contentious issues that Infosys is facing currently,” they wrote.

    Sikka quit Infosys in a huff last week, citing “baseless, malicious and personal attacks”. The Infosys board blamed Murthy for Sikka’s resignation. Murthy has been critical of the corporate governance practices at Infosys since Sikka, the company’s first non-founder CEO, took charge in 2014.

    Infosys shares have fallen 12% since Friday, eroding the company’s market value by Rs 29,000 crore. The company is among the top five stock picks of most equity mutual fund schemes.

    Though shares gained 2% on Wednesday, snapping their three-day losing run on hopes Nilekani would return, investor optimism was measured. The stock closed at Rs 894.50 on the Bombay Stock Exchange.

    Nilekani was Infosys CEO from 2002 to 2007. He was on the company’s board from its inception until 2009. During his tenure, Infosys’ net sales soared fromRs 2,603.59 crore in 2002-03 to Rs 13,893 crore in 2006-07, a compounded growth rate of 40%. Infosys shares jumped 330% during the period compared with 277% gains in the Sensex.

    A third company official felt Nilekani could be persuaded to help rebuild Infosys given that he still has an emotional connect with the software services firm.

    Sources close to Murthy said Nilekani will have to come in as chairman, potentially ousting two current occupants — Seshasayee and Venkatesan. “The understanding is that he will come in and reconstitute the board,” the source said.

    Nilekani’s return would also put on hold Murthy’s plans to reconstitute the board by seeking a mandate at an extraordinary general meeting (EGM). ET had reported that Murthy was mulling the move to make changes he required.

    FOREIGN INVESTORS TRYING TO GROUP
    Sources said foreign investors are also trying to group together to find a solution to the crisis.

    Equity analysts have said Nilekani’s return would be a positive for Infosys, but doubted he would return in an executive capacity.

    “There is no doubt that it is a near-term positive. He will be able to solve the problems between the board and the founders. However, in the long term it is important for the company to continue on the path of new services,” said Urmil Shah of IDBI Capital.

    Other analysts hope Nilekani would be able to convince Sikka to stay on. Sikka remains executive vice-chairman till March 2018.

    “I am sure he can convince Sikka to take back his resignation. Sikka has done a great job of transforming the company. The problems facing Infosys are not business-related, but related to the ongoing rift,” said Edelweiss analyst Sandip Agarwal.

    A senior fund manager, who signed the letter to Infosys, said investors want Nilekani to be in charge. “There is a consensus among all of us that Nilekani is the best person for the job because of his stature,” the fund manager said. “Also, no credible professional will join Infosys in such a messy situation.”

    Infosys row: Read all the latest updates here
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