Infosys shares tumble after CEO, Vishal Sikka, resigns

Written by on August 18, 2017 in News with 0 Comments

Vishal Sikka attends a news conference in Mumbai, India, February 13, 2017. REUTERS/Danish Siddiqui

(Reuters) – India’s No. 2 IT Services company Infosys Ltd  said Vishal Sikka had resigned as managing director and chief executive of the company with immediate effect, sending shares tumbling more than 7 percent in early trading on Friday.

The move comes after a protracted war of words between the company and its founders and some former executives, who were unhappy with various decisions taken by the board.

The founders, who still own 12.75 percent of the firm, had questioned a pay rise granted to Sikka and the size of severance payouts given to others, including its former finance head Rajiv Bansal.

An Infosys announcement stated that U.B. Pravin Rao, its chief operating officer, had been named as interim managing director and chief executive. Sikka was named executive vice-chairman.

Major events at Infosys Ltd since the appointment of Vishal Sikka as chief executive officer three years ago. Sikka resigned on Friday.

* Aug 2014: Vishal Sikka, a former SAP AG executive board member, takes over from S.D. Shibulal as Infosys chief executive to revive the fortunes of the company which was losing market share.

* Dec 2014: Some of Infosys’s founders – N.R. Narayana Murthy, Nandan Nilekani, S.D. Shibulal and K. Dinesh – sell shares worth $1.1 billion in the company, cashing in on a more than 20 percent gain in the stock since Sikka’s appointment.

* Feb 2016: Board decides to extend Sikka’s tenure by two years to 2021.

* Feb 2017: Infosys says had already addressed concerns about executive pay after media reported that its founders had complained about decisions including a pay hike for Sikka.

* Feb 2017: Company reassures investors and analysts it was not being distracted by a dispute with founders.

* April 2017: Founder Murthy criticizes salary hike given to Chief Operating Officer Pravin Rao

* April 2017: Company announces $2 billion cash return to shareholders and appoints independent director Ravi Venkatesan as co-chairman of board, moves seen aimed at placating some founders and former executives who were critical about the management.

* Aug 2017: Sikka resigns as CEO, citing a stream of distractions and disruptions.

Infosys shares fell 7.1 percent to a more than one-month low of 948.25 rupees at 0945 IST (0415 GMT).

(Reporting by Euan Rocha in Mumbai and Tanvi Mehta in Bengaluru; Editing by Himani Sarkar; list compiled by Aby Jose Koilparambil; Editing by Miyoung Kim)

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