Seshasayee must quit; Infy should engage with founders, not law firm: Bala

Interview with former board member, Infosy

V Balakrishnan, former board member at Infosys has been vocal in raising governance issues at India’s second largest software exporter.

He's asking for chairman R Seshasayee’s resignation over lapses in disclosures and corporate governance norms. He terms  the move by Infosys in hiring a law firm to engage with the founders on the concerns raised by its founder N R Narayana Murthy as 'stupid'.

Edited excerpts of an interview with Ayan Pramanik.

With Mr Murthy coming out in the open against Infosys board, is it time that Seshasayee step down as chairman?

I think there is trust deficit between the board and the founders. There is no need to bring in a legal firm to intermediate between the founders and the board. It is the board’s job to directly engage with the large investors whenever there is a concern. So my advice as a shareholder will be that the chairman should step down and they should have an interim chairman and engage effectively with the founders; address all the concerns. This is the issue with the board and the founders, and nothing to do with the CEO.      

The company has appointed a law firm to engage with founders and other shareholders. What is your view on this? Is it the right way to do?

This is a stupid way to do it. When there is a large shareholder, it is the board’s job to interact with them and settle it. There is no issue of law, rather it is an issue of governance.   

Mr Murthy says doubts arise that it could be hush money on severance packages to Bansal and Kennedy. Is there concerns that numbers could be fudged?

I do not know that. When you pay a large sum of money to an outgoing CFO, I think naturally it will create lot more doubts in the minds of people, especially when the company is not able to properly explain that. The whole issue is why such a large amount is paid and it was suddenly stopped.  There is no clear communication from the company’s side. So, people will come to their own conclusions. 

Murthy says said good people like” NYU Stern professor Marti Subrahmanyam should join as co-chairman and replacement of Lehman as the head of an important board committee; and the appointment of unnamed former Infosys employees “schooled” in the company’s values as directors. If offered, will you take the opportunity?

I am doing better things outside. We are running a venture capital fund, it is very exciting space. So, I don’t have any intention to go back.