Infosys Slumps 7% After CEO Resigns

Infosys Slumps 7% After CEO Resigns

Infosys (500209.IN) is down 7% on Friday after CEO Vishal Sikka resigned from the Indian IT company.

The resignation comes amid a public spat between the board and the company’s founders over the direction of one of India’s most globally successful businesses. Mr Sikka has been appointed executive vice chairman.

Founder N.R. Narayana Murthy, who earlier this year said he regretted quitting as chairman in 2014, has taken aim at the company over the CEO’s salary and corporate governance issues.

Here is what Infosys told the market :

In his notice of resignation to the Board, Dr. Sikka reiterated his belief in the great potential of Infosys, but cited among his reasons for leaving a continuous stream of distractions and disruptions over the recent months and quarters, increasingly personal and negative as of late, as preventing management’s ability to accelerate the Company’s transformation.

The Board understands and acknowledges Dr. Sikka’s reasons for resignation, and regrets his decision. In particular, the Board is profoundly distressed by the unfounded personal attacks on the members of our management team that were made in the anonymous letters and have surfaced in recent months. As the Board has previously stated, a series of careful investigations found no merit to the unsubstantiated and anonymous allegations that had been asserted. The Board denounces the critics who have amplified and sought to further promote demonstrably false allegations which have harmed employee morale and contributed to the loss of the Company’s valued CEO.

The resignation comes after an exodus of senior executives from the company. Chief executive officer Pravan Rao has been appointed as interim CEO.

Infosys (INFY) shares are down 6% this year.

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