As part of its capital allocation policy, Infosys has identified an amount of upto Rs 13,000 crore to be paid out to its shareholders during fiscal year 2018. Experts say such a move is aimed at keeping its shareholders happy and at peace so that they do not time and again question the management for different issues.
Some experts point out that though Infosys had announced that its internal audit committee found no evidence of a whistle blower's allegations of improprieties related to the Panaya acquisition deal, it does not mean that the deal was clean and brought value to the company.
“Despite the clean chit given by the internal audit committee of Infosys to the Panaya deal, I feel that there is still something fishy about the deal. Why did the company initially agree to pay such a high severance package to the former chief financial officer Rajiv Bansal who was against the deal? Moreover, a loss making company was taken over at a time when the IT industry is having a tough time. The shareholders will time and again question such deals and Infosys wants to keep them pacified hence it has identified an amount of Rs 13,000 crore to be paid to them this fiscal,” said Alok Shende of Ascentius Consulting, Mumbai.
He further points out that Vishal Sikka as the head of such a large IT company has not exuded the level of maturity when it came to dealing with such a situation. “The whole Panaya issue and other issues confronting the company should have been handled with much higher levels of maturity by Sikka. I feel he has not lived up to the expectations. He was hired to take Infosys to greater levels and to achieve the USD 20 billion mark but nothing much has been talked about it in the recent times,” added Shende.
On the other hand, experts such as Kris Lakshmikanth of Head Hunters India Limited say that just a clean chit to Infosys on the Panaya deal does not mean that the deal has turned out to be valuable for the company. “Valuation is a very tricky thing and the audit committee may have given a clean chit to Infosys, but we are not seeing much value coming out of the deal. The company as such was bleeding and the whole idea of acquiring it was wrong. In the future, Infosys will be doubly careful about acquiring any new company,” said Lakshmikanth. He further says that there is nothing unusual about the visa issues and the settlement by Infosys as many Indian IT companies are dealing with such issues in the US and elsewhere.
The company during its Annual General Meeting (AGM) in Bengaluru announced that around 11,000 employees were released during the last fiscal due to automation and that they were increasingly on the path of bringing in further automation. R. Seshasayee, chairman of the board of Infosys, announced that he will retire in May 2018 and this was his last AGM. He also said his succession will be a smooth transition.
During the AGM, many shareholders expressed their concerns about Infosys getting negative publicity in the media on a regular basis especially during the last one year. They said that this was not the case during the time of its founder N.R. Narayana Murthy.