Idols of the cave

Distractions and distortions could be the underlying theme for Sikka and his ouster

It doesn't say much for the best practices and corporate governance standards in bellwether - Infosys - that the founders who are also minority investors can bring a CEO down. Equally, the powerful founders led by N.R. Narayana Murthy with their set of value systems have raised pertinent questions about the Panaya deal, hush money paid to long-time CFO Rajiv Bansal who refused to sign off on the same Israeli company purchase and even the compensation package of the CEO anointed by Murthy himself. In a stark replay of the Ratan Tata-Cyrus Mistry battle where he turned against his own appointee, the Murthy-Vishal Sikka joust has ended as a spitting image of the first. Distractions and distortions could be the underlying theme for Sikka and his ouster. The Infy board has backed Sikka in this battle and even during the presser one could see chairman R. Seshasayee and CEO Sikka together while U. B. Pravin Rao now designated interim CEO and MD was sitting alongside new CFO Ranga and co chairman Ravi Venkatesan. The battle lines were drawn very clearly.

The Infy board has complicated matters by backing Sikka - Mr Murthy's continuous assault, including this latest letter, is the primary reason that the CEO Dr Vishal Sikka has resigned despite strong board support. The board then went on to say that they have been engaged in a dialogue with the Founder over his concerns and after trying to find feasible solutions within the boundaries of law and without compromising its independence, 'these dialogues have unfortunately not been successful.'

Now one can argue that should the founders be interfering in a company that they spawned but don't have board positions in anymore? After all you chose to cut the umbilical cord yourself and unlike the Tata Trusts which had the casting vote in the Tata-Mistry joust, you just came with a plain Founder's tag with minimal shareholding. Obfuscation over Panaya is what triggered off the fire fight and again the argument given by the Founders is that they wanted internal systems and processes to be tighter. The conduct of chairman R. Seshasayee and his handling of these sensitive issues leaves a lot to be desired. Even in the first big presser, he chose not to dwell on material issues which festered and finally tripped Sikka.

Ethics, transparency, corporate governance have once again been sacrificed at the altar of deceit and duplicity. Seshasayee claimed on Friday that whistle blower complaints had been investigated and nothing came out of it. If the washing machine turned up a squeaky clean and spun dried truth, then why is it that Murthy pursued the matter. It doesn't augur very well for corporate India that the recent past has seen three such ugly public spats - first in the house of Tatas, then Infy and most recently Raymond, and in each and every case, nobody bothered about the hapless investors and shareholders who took the biggest hit. SEBI saw the slide in both Tata companies and in the Infy scrip on Friday and couldn't do anything about it. Imagine Infy went below 900 on Friday leaving investors bleeding. Most interestingly, on Thursday, the market had no clue about what was to pole axe them for they were gung-ho on the buyback price to be declared at Saturday's board meeting which should be incendiary.

It is a poor reflection on India Inc that these climactic events have taken place in what are perhaps known to be India's best-run firms. Which tells you that they have feet of clay living as idols of the cave. The widening chasm of trust deficit has proved deleterious for the image of what was once regarded as peerless. Murthy has fought for image, just as Sikka was fighting for future proofing the company. For the moment, Sikka is only the first casualty of war.