Promoters rooting for Change of Infosys Chair~Seshasayee to Subrahmanyam?

The Infosys Situation is getting as explosive as the Tata Group’s did with  Promoters rooting for Change of Infosys Chair~Seshasayee to Subrahmanyam?

Corporate (Mis)Governance Issues~First Tatas & now Infosys !~Chairman & Board under Attack by Promoters

It’s been disruptive global times in many ways with Trump now US President and India re-gearing up Post Demonetisation & the Indian Corporate Big League crying out “Me Too” .

Headlines were hogged for months as first Promoter Family’s Ratan Tata led the unusually aggressive initiative  in the illustrious Tata Group to fire it’s Chairman, Cyrus Mistry & now Promoter N R Narayana Murthy has called to replace Infosys Chairman with Prof Marti Subrahmanyam .Ex Directors T V Mohandas Pai & V Balakrishnan support Murthy on this  & are calling for the Chairman’s resignation for serious misgovernance on issues of High Severance Packages,Hike in CEO Package ,Director Appointments,Inducements to bag Contracts,non disclosures among others that strike at the very core values Infosys was build on

Narayan Murthy has just asserted in an interview that the unusually high severance package to the ex CFO was just hush money cloaked & that he was concerned about falling standards in corporate governance

Whoa ! That’s a criminal charge in my view !

N R Narayana Murthy is rooting to replace Seshasayee with Prof Marti Subrahmanyam,Charles E Merrill Professor of Finance at the New York University Stern School of Business.The Professor has already served as an independent director on the Infosys Board for thirteen years till 2011

Four Years ago in January 2013 I had an opportunity to interact with Prof Marti Subrahmanyam when he delivered a paper at BSE on the  manipulation of Libor Rates.I had blogged on this then.I had asked him if the  Banks simply had to rig the rates to survive & if this was the case then the orders had to come from the top.Prof was taken aback a bit by the query & clearly reluctant to confirm this.Expected truthful answer should have been “Yes” as the question was rhetoric.Instead he had brushed it off abruptly & I got the impression of an intellectual arrogance at display.That view has stayed as I’ve not got another opportunity to interact to be able to change this view …He’s quickly thrown in the hat to become Infosys Chairman.Clearly Narayan Murthy has been in touch with him on this before putting up his name to replace Seshasayee,Murthy has always been straightforward and blunt like in yesterday’s interview calling the severance pay as hush money !.Can’t imagine Subrahmanyam to be as straightforward & I daresay will be Murthy’s ‘Voice’ just as Ratan Tata,in my arguable view,wanted a ‘Yes’ Man Chairman to head Tata & which Cyrus Mistry turned out to be not

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Nusli Wadia’s Interview in Economic Times Today….Finding it difficult to let Go of the Past !

I have audited a Wadia Group Company and lived the 1980s and 1990s through the bitter rivalry between Nusli Wadia and Dhirubhai Ambani….so it was with some Interest that I read Nusli Wadia’s Article and Interview in today’s edition of the Economic Times…..Brought back some Memories

He has chosen to be interviewed and communicate now after so many years..and amusingly he has done so through the Times group despite being very close to the Express Group

I remember the 1980s when I had joined the prestigious CA Firm,S B Billimoria and Co ( Now part of one of the Big 4, Deloitte Group) to begin my articles….my first audit was BRT ( Bombay Ring Tools),a Wadia Group Company….What I remember was the condescending attitude of their Chief Accountant…he was a very emotional Parsi Gentleman ,who held a strong view that Statutory Auditors were merely like Employees of the Company and should therefore behave as such…they had no right to ask questions and Wadias were even their Boss !….This irked my seniors quite a bit…I was a total newcomer…so I just observed…..My Seniors used to take great pleasure in never missing an opportunity to argue and work up steam with this Accountant…he used to get red in the face and very angry and even complained to our Firm Partner that the Audit team was getting Personal !…while most Lunches during the Audit were at ‘Shere-e-Punjab’,a lane away from Wadia Group’s ‘Neville House’  at Ballard Estate ( near the Docks) in South Mumbai,we were treated to ‘Khyber’ when our Firm Partner too was present.It was my first audit and I learnt that Ethics in Business and Personal Ethics are two separate Issues 

Nusli Wadia’s wife Maureen Wadia (Gladrags fame) also used to get both their sons, Jeh and Ness, when they were kids, to play Badminton at the Willingdon Club…It was always in a Mercedes…..Never played with them,though spotted them very often as my friends and I alternated between Tennis and Badminton depending on court availability.  

Nusli Wadia talks in his Interview of many things…Upholding Value is one of them

  • How he respects those who have grown upholding Values…Tatas,Keshub Mahindra,Deepak Parekh…..how the Political System got ‘taken over’ by the strong nexus with Business….how the Mantra today is to scuttle Other’s Projects,preventing their approvals…fixing them,in simple terms….they never did this in their Generation,says Wadia…all business groups co-existed with each other and were happy to see each other Grow….What has grown since then is this business of ” I will Block you or I will Stop you” !…How Ratan Tata had a tough time breaking the strangleholds of Four or Five in the Tata Group….Nusli Wadia does not mention these men…but by implications they should be Russi Mody of Tata Steel,Darbari Seth and his Son of Tata Chemicals,Ajit Kelkar of Indian Hotels and Sumant Moolgaonkar of Telco…I remember,that Tata group had to prepare a criminal dossier on Ajit Kelkar to force him to resign     

My View of Nusli Wadia’s View on ‘Values’ is a bit mixed….Everybody Values those who upholds Values !But,in my view ,it was this very Monoply and Business Control of the Old Groups that new aggressive Businessmen attempted to break by aggressive means….other less aggressive means were easily thwarted…… Nusli Wadia knows that post Independence,Indian Business grew and was centered around Tatas,Wadias,Birlas and the Mafatlals….It was very difficult to break into the Business of this coterie….These Business groups controlled most Indian Business and thwarted anyone who wished to enter or scale up in their lines…Textiles,Steel,Cotton to name a few…..It is this barrier that newer and more aggressive businessman like Dhirubhai Ambani broke through and scaled up….It was a Catch 22 situation for these newcomers….They had to do what they had to do in order to do what they had to do ! ….So,in this context, to imply that many Newer Big Business has emerged without any Value base is not wholly correct…Old Houses also ‘managed’ the government and it’s bureacrats…but Newer Business ‘managed’ them bigger and therefore better !

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Hemendra Kothari to sell his remaining 10% of DSPML to Bank of America…revived sour memories of DSPML

Saw Hemendra Kothari come on NDTV Profit today and confirm that he has sold the remaining 10% he held in DSPML to Bank of America….Some Years ago he had sold 40% to ML for US $ 500 Million…he refused to disclose at what price he sold this 10%,saying it’s an unlisted company….says he’s now 62 and wants to devote time to Philanthrophy(his family,he says,has been involved in it for years) and Environment and Wildlife Concerns…will remain as Non Executive Chairman of DSP Blackrock though…rubbished the notion that he is selling because he was apprehensive about clashing with the culture and way of operations of  Bank Of America,who has taken over ML

Years ago his DSPML refused to buyback from us shares of Namtech Systems…We had invested a significant amount.DSPML had placed these shares with us at Rs @ 55 with a promise that this Nambiar Group Company ( Nambiar was the Chief Secretary of the Karnataka Govt and whose flagship was the listed Namtech Electronics) would come out with an IPO within a year of placement and we could sell in the Markets or else they would buy back the Shares at Rs 113 if the IPO did not materialise or if the Listed price was lower than Rs 113….Those were heady times and being DSPML we trusted them,only to be let down as they dishonoured their word….When approached by us,Hemendra Kothari and the International Head of ML chose  to simply ignore and not respond and walk away from the buy back committment while Nambiar said that he had no role to play in this Buy back Committment even though we pointed out the MOU to him……It’s over Ten years now and Namtech Systems has gone kaput…no business and no IPO…Oh ! shares yet exist…Not sure of the company though !

That’s why we make icons of Narayan Murthy and Ratan Tata….whose word is their Bond  and whose Measure is not measured just by the Money ! 

      

Sad that in a Country of 1.2 Billion People we have just 1 or 2….or 3 Business Role Models

Ratan Tata,Narayan Murthy and Deepak Parekh….Just Three Business Role Models who score top percentage on Personal and Business Ethics and Integrity and sense of Fairplay

What about all the rest in Business !?…Yes,we are patriotic,yes we are sensitive and self righteous…..but many in Business may succumb to the adage ” What’s Integrity to Opportunity !”

Something is adulterating our Value Systems…a lot of nexus in both public and private domains…. and scaringly it’s deep rooted…and worryingly the coalition era will continue even in the upcoming general elections…so governance constraints will continue too….so if you see our PM with his hands behind,he’s aware but can’t act as his hands appear tied…and if his hands are in front with fingers entwined,it’s like he’s standing humbly and helpless before a Judge!   

Maybe Corruption and Capitalism go together !

Thankfully in other disciplines than Business we have world icons and role models…be it in Sports,in the Fine Arts or in Science among others…the Genius of A R Rahman has just been globally recognised by a Golden Globe Award for his score in Slumdog Millionaire