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The Union ministry of corporate affairs (MCA) has informed Infosys that the appointment of Rohan Murty, son of co-founder and executive chairman N R Narayana Murthy, does not require its approval.
The Bangalore-based company, also India’s second largest information technology (IT) services firm, had filed an application with the government under section 297 of the Companies Act, 1956, seeking approval for Rohan’s appointment. “The application was filed as a matter of abundant caution and the MCA has informed us that its approval is not required,” the company said in reply to a query by Business Standard.
Section 297 precludes directors from entering into any business dealing or arrangements on behalf of the company in which they have a personal interest or conflict of interest.
Infosys also clarified that Rohan had been designated executive assistant to Narayana Murthy and not as vice-president. In August, when speculation was rife that Rohan may have been given the designation of V-P, the firm had issued a statement saying his designation would be confirmed after his appointment was approved by the MCA.
Rohan’s appointment as his executive assistant was a precondition Narayana Murthy set while accepting the board’s proposal to rejoin the company in June. The move raised eyebrows because it was a deviation from the policy the co-founders had long followed, that of not bringing members of their family into the company.
The company also reiterated that Rohan’s term as the executive assistant to the chairman will be co-terminus with that of incumbent N R Narayana Murthy, and he is being paid a token compensation of Re 1 a year based on his request.
According to company sources, Rohan is now leading a ‘productivity improvement’ drive at Infosys, one of the three major initiatives undertaken by Murthy after he returned to the company. The other initiatives are improving sales effectiveness and ensuring cost rationalisation.
