Reports of Infosys Co-Founder Nilekani's Board Return Trigger Stock Rebound
Nilekani is poised to become Infosys' non-executive chairman in the next few days, the Times of India reported on Thursday, adding he would come for a predetermined period with the aim of achieving a series of goals including hiring a new CEO.
Infosys (photo for representation, image: Reuters)
Infosys co-founder and former chief executive Nandan Nilekani is set to return to head the company and put an end to an acrimonious dispute between its board and founders, Indian media reports said, sending the outsourcer's shares higher. Nilekani is poised to become Infosys' non-executive chairman in the next few days, the Times of India reported on Thursday, adding he would come for a predetermined period with the aim of achieving a series of goals including hiring a new CEO.
The board has been locked in a dispute for months with the company's founders, led by former chairman Narayana Murthy, who have accused the directors of governance lapses. The dispute led to the resignation of the company's Chief Executive Vishal Sikka last week. Sikka, a former SAP executive, who joined Infosys as its first non-founder CEO in 2014, resigned amid what he said were "baseless, malicious and increasingly personal attacks", sparking a massive sell-off in Infosys' shares and wiping billions of dollars off its market value.
Television station CNBC-TV18 also said Nilekani was likely to return as the head of the company, once a poster child of India's showpiece IT sector. Nilekani, one of the company's co-founders who served as its CEO from 2002 to 2007, could not be reached for comment. He and his family own about 2.3 percent of Infosys and have a net worth of $1.7 billion according to Forbes. The media reports come after a group of 12 big institutional investors in Infosys wrote to the company this week calling for Nilekani's return to the board in a "suitable capacity" to help resolve the feud.
ET Now television channel said several members of Infosys' board have offered to resign, paving the way for Nilekani to potentially return. An Infosys spokeswoman declined to comment. Founder Murthy, current chairman of the board R. Seshasayee and co-chairman Ravi Venkatesan also did not reply to calls seeking comment. V. Balakrishnan, a former finance chief of Infosys who still owns shares in the company and has been siding with Murthy in the recent disputes, said Nilekani becoming the chairman of the board will give comfort to all stakeholders.
"Nandan's a global face, he's well connected, well networked globally and he has a track record of running Infosys as a CEO," Balakrishnan told Reuters. "What's required is a face which will give comfort, help to restructure the board and hire a new CEO." By 0840 GMT, Infosys shares were trading 2.4 percent higher in a Mumbai market that was little changed.
The stock has gained 4.8 percent in the last three sessions after hitting a more than three-year low on Monday.
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