Shutterstock photo(RTTNews.com) - Shares of Infosys Technologies Ltd.(INFOSYSTCH, 500209, INFY) were losing around 10 percent in Indian trading on Friday after the Software exporter announced that Vishal Sikka has resigned as the Managing Director and Chief Executive Officer with immediate effect. The company appointed current chief operating officer Pravin Rao as the Interim-Managing Director and Chief Executive Officer.
Further, the company appointed Sikka as the Executive Vice-Chairman. Sikka would hold office until Infosys finds a permanent CEO and Managing Director, no later than March 2018.
The decision comes amid the heightened issues between the board and the company's founders led by ex-chairman Narayana Murthy. The company is facing allegations of poor corporate governance, including criticism of acquisitions and executive pay.
In his new role, Sikka will continue to focus on strategic initiatives, key customer relationships and technology development, and will report to the Board, while Rao will report to Sikka.
In a statement, the company noted that Sikka reiterated his belief in the great potential of Infosys. But, the reasons for leaving included 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....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 company said.
Since taking the top job three years ago, Sikka helped grow Infosys' revenue by about 25 percent. Over his tenure, the company's shares had gained about 21 percent, before Friday's decline.
Sikka wrote on his blog after the announcement, "After much contemplation I have decided to leave because the distractions, the very public noise around us, have created an untenable atmosphere. Life is too short to engage in battles of opinions in the public, these add no value, take critical time and focus away from the business, and indeed add more to the noise, to the eardrum buzz."
In India, Infosys shares were trading at 917.10 Indian Rupee, down 10.2 percent.
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