Founders can't sack Infosys chief: Legal expert Khaitan
The shareholders or non-executive founders have no say in the decision-making process of the management, says legal expert.
Bengaluru: Although a slew of former directors and non-executive founders of Infosys have raised concerns over alleged lapses in corporate governance, with ex-director V. Balakrishnan calling for the current chairman's resignation, the chances of shareholders and non-executive members ousting Chairman R. Seshasaayee are very slim as they have no executive or managerial roles to play in the company.
A legal expert, Rajiv Khaitan, of the law firm, Khaitan & Co., said that the board is not legally bound to consider the recommendations of shareholders and non-executive founders.
“As long as the board supports the current chairman, the shareholders or non-executive founders have no say in the decision-making process of the management,” explained Mr Khaitan.
Infosys has appointed Cyril Amarchand Mangaldas, corporate governance experts, as a protection mechanism to facilitate the process in a manner which is not violative of law.
According to an official statement issued by the company, the board has appointed the law experts to formalise the process and receive inputs from promoters and other key stakeholders to recommend to the board accordingly.
Chances of Seshasayee's ouster slim
The long-term investor in Infosys, Oppenheimer Funds' portfolio manager, Justin Leverenz, has supported CEO Vishal Sikka in an open letter to Infosys.
OppenheimerFunds holds 2.7 % stake in the company. "As large, long-term investors in Infosys, we want to express our support for the management team of Dr Vishal Sikka. There have been loud, cancerous rumours of intervention by non-executive founders in the management team," he stated in the letter.
In an official statement issued by Infosys, the seniormost member of the board and chairman of the nomination and remuneration committee, Jeff Lehman, also backed Mr Seshasaayee.
"The members of the Board are deeply engaged with the Company and spend considerable time on the affairs of the Company. The Board has full confidence in the leadership of Seshasayee to steer this Company in these challenging times," he said. With the current management being backed by the investors and the board members, Mr Seshasaayee's ouster at this current juncture, seems
unlikely.