Nandan Nilekani-headed Infosys board gives Vishal Sikka a clean chit in $200 million Panaya deal, disappoints NR Murthy

The Infosys board headed by chairman Nandan Nilekani on Tuesday gave a clean chit to the controversial USD 200 million Panaya acquisition, saying there was no merit in the allegations of wrongdoing. Infosys had acquired Israel-based software firm Panaya under former Infosys chief Vishal Sikka. Infosys in a statement on Tuesday said: "After careful consideration led by our Chairman, the Board reaffirms the previous findings of external investigations that there is no merit to the allegations of wrongdoing."

Giving a detailed outline of the review undertaken on Panaya issue, Nilekani said: "In light of my review of these matters, I am fully persuaded, as is the entire Board, that the conclusions of the independent investigations are correct." Infosys founder NR Narayana Murthy had demanded that the full report by Gibson, Dunn and Crutcher on whistleblower allegations pertaining to the Panaya deal, be made public. Nilakeni rejected the demand for publishing the full investigation report, saying could impair cooperation.

Emphasising that confidentiality was key to ensuring the cooperation of whistleblowers and other participants in any investigative process, the company cautioned that the precedent of releasing the full investigation reports could impair the cooperation of participants in case the need arises in future.

Hours after the Infosys board cleared Vishal Sikka of any wrongdoing in Panaya deal and severance pay, Infosys founder N R Murthy said he was disappointed with core questions still unanswered. He asked how and why Infosys board approved an unusual and unprecedented severance payment agreement of 1000 per cent to former CFO Rajiv Bansal.

In a statement, Murthy said: "I am disappointed. The core question still is how and why the Infosys board approved an unusual and unprecedented severance payment agreement of 1000 per cent (of the standard Infosys employment contracts) to the former CFO."

Murthy also said he stands by every question on poor governance raised in his speech to Infosys investors on August 29, 2017. Murthy said fact remains none of these questions have been answered by Infosys board with transparency it deserves. "Also, why the board did not disclose this information proactively and much earlier. Sadly, it appears nobody will know the truth," Murthy said.

When Vishal Sikka was at the helm, Infosys paid Rs 17.38 crore in severance, equalling 24 months of pay. Rajiv Bansal left Infosys in 2015. However, NR Murthy and former board member Mohandas Pai slammed the Infosys Board's decision and  asked the company to explain such hefty pay. NR Murthy had termed the severance pay as 'hush money' and said: "Providing huge severance pay to some departing employees while giving only 80 per cent variable for employees in the company is one such example. Such payments raise doubts whether the company is using such payments as hush money to hide something ."

Infosys on Tuesday reported its second quarter financial results. The company's net profit grew 3.32 per cent to Rs. 3,726 crore during the second quarter of 2017-18, while revenues grew nearly 1.5 per cent. This was Infosys' first earnings announcement after Nilekani took over the reins of Infosys after the ouster Vishal Sikka as CEO amid a bitter war of words between the management and the founders.