Blaming a “continuous stream of distractions and disruptions” for his decision to quit as Infosys CEO, Vishal Sikka has said these attacks had become increasingly personal and negative.

Sikka's resignation sent the Infosys shares tumble as much 9.4 per cent to their lowest since June 28.

Sikka, 50, a former German IT major SAP executive who was appointed CEO and MD of $10-billion revenue company three years back, will become Executive Vice-Chairman until a new MD and CEO is hired.

While the permanent replacement is to be hired no later than March 31, 2018, Sikka will focus on strategic matters and draw an annual salary of $1.

U B Pravin Rao, Infosys’ Chief Operating Officer, has been appointed a Interim CEO and MD, reporting to Sikka under the overall supervision and control of the board.

Poor corporate goverance

Once a poster boy of Indian IT success story, Infosys has been battered by intense acrimony, with founders accusing the board of poor corporate governance on issues like executive pay and acquisitions.

Sikka said these distractions were preventing the management’s ability to accelerate the company’s transformation.

While he didn’t detail out these “distractions”, it may be noted that some of Infosys founders, including N R Narayana Murthy, have alleged corporate governance lapses at the firm and questioned the high compensation paid to Sikka and severance package extended to certain former executives.

The stand-off between the founders and management has been on for a few quarters now, with both sides making public statements on these issues.

'Panaya acquisition overvalued'

Also, an anonymous letter was sent to the Securities and Exchange Board of India and the US Securities and Exchange Commission earlier this year, alleging that the Israel-based Panaya acquisition was overvalued and that some Infosys executives may have benefited from the deal.

Sikka, in a letter to the board members, today said: “false, baseless, malicious and increasingly personal attacks” have been made over the last many quarters and these allegations have been repeatedly proven false by multiple independent investigations.

“But despite this, the attacks continue, and worse still, amplified by the very people from whom we all expected the most steadfast support in this great transformation,” Sikka said.

He said addressing this “noise” has consumed hundreds of hours of Sikka’s time in recent times and therefore, he came to the decision to quit.

The board said it is “profoundly distressed” by the unfounded personal attacks on the members of the management team.

“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,” Infosys said in a statement.

Full text of Vishal Sikka's resignation letter

TCS is up over 2%. Are investors seeing more value in TCS now given the uncertainties at Infosys? @businessline @dinakaran @srinivasanravi

— Rajalakshmi Nirmal (@rajalakshmi_ns) August 18, 2017