Infosys founders in no hurry to lose their promoter tag

Even as the discontent between Infosys founders and the board takes centre stage, the former, who once had collectively reached out to the board to be declassified as promoters, might not be in a hurry to do so given the recent turn of events in the $10-billion company .

Infosys founder N R Narayana Murthy had written to the board in 2014, after he and the other promoters left the company , to declassify them as they would neither have association with the company nor exercise any control over the affairs of the firm.

They had then sought appropriate reclassification of their revised status. And at that time, Infosys had said that it was in the process of seeking appropriate regulatory guidance on the matter. With no forward movement on the topic, the founders are still classified as promoters.

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An email sent to Murthy remained unanswered at the time of going to press.

“Infosys was the trigger for Sebi to propose norms to allow reclassification of the company's promoters as public shareholders. It seems like there is little inclination to sound out the board on the reclassification status currently,“ said Shriram Subramanian, MD of corporate governance research firm InGovern Research Services.

About three years ago, Sebi had said in a discussion paper that the promoter group in listed entities could reclassify their shareholding into the public category by way of open offer and separation agreement.

The founder-versus Infosys board spat got a new twist on Thursday when Murthy publicly expressed his displeasure on some of the sore points bothering him, including the severance package and lack of adequate governance practices.

Even as the differences play out in the open, Vivek Wadhwa, distinguished fellow at Carnegie Mellon University Engineering at its Silicon Valley campus, said that when there is a new management, the old guard always feels threatened.