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Sikka’s exit triggers war of words between Infosys Board and founder Narayana Murthy



[vc_row][vc_column][vc_column_text]Software major’s Board blames Murthy’s dictatorial ways for Vishal Sikka’s resignation as Infosys CEO. Hours later Murthy denies having ever made any comments against Sikka’s style of functioning and says he will reply to the Board’s allegations at an appropriate time

In developments reminiscent of the internal turmoil that had rocked the Tata group a year ago, the divide between the Old and the New Guard in software major Infosys came to the fore on Friday.

It all began with the sudden resignation of the company’s managing director and chief executive officer, Vishal Sikka, on Friday morning who blamed his decision on “malicious and increasingly personal attacks” made against him by “the very people from whom we all expected the most steadfast support”. Sikka’s resignation letter and another note that he sent to his employees in which he spoke about an “untenable atmosphere” was seen as a veiled attack on Murthy.

As Sikka’s resignation and his comments about it went viral on various media platforms, the Infosys Board came out in his support, categorically blaming Murthy’s “continuous assault” on the top executive as the reason for his exit.

By Friday evening, Murthy too issued a statement asserting that “It is below my dignity to respond to such baseless insinuations” while adding that he would reply to all allegations in the right manner and forum and at an appropriate time.

An official communication released to the bourses by the Infosys Board stated: “Mr. Murthy’s continuous assault, including this latest letter, is the primary reason that the CEO, Dr Vishal Sikka, has resigned despite strong Board support.”

The letter that the statement mentioned was a reference to an e-mail which was leaked to certain sections of the media in which Murthy had purportedly claimed in a communication to some of his advisors that he was told by at least three independent directors at Infosys that Vishal Sikka “was more chief technology officer (CTO) material than chief executive officer (CEO) material”.

“Murthy’s letter contains factual inaccuracies, already-disproved rumours, and statements extracted out of context from his conversations with Board members,” the Infosys statement said.

However, Murthy partly rebutted the claims of the Infosys Board saying: “I have not commented on Sikka’s work, my problem is with governance at Infosys; I believe fault lies with the board.”

The Inforsys founder added that he was “extremely anguished by the allegations, tone and tenor of the statement. I voluntarily left the board in 2014 and am not seeking any money, position for children or power. My concern primarily was the deteriorating standard of corporate governance which I have repeatedly brought to the notice of the Infosys board.”

It is evident from the exchanges between Sikka, the Infosys Board and Murthy that the war of words will only get uglier in the days to come, especially since the Board made it clear that it is “fully independent, with professionals as its members who have been appointed by a clear majority of the shareholders” and that it would not give the founder a formal role in the company’s governance.[/vc_column_text][/vc_column][/vc_row]

India News

Withdrawal of Rs 2,000 notes statutory exercise not demonetisation: RBI tells Delhi HC



The withdrawal of Rs 2,000 banknotes is a statutory exercise, not demonetisation, the Reserve Bank of India (RBI) told the Delhi High Court on Tuesday.

The high court was hearing a petition challenging the decision by the RBI and SBI that enables the exchange of Rs 2,000 notes without the requirement of an identity proof. The plea filed by Advocate Ashwini Kumar Upadhyay said the decision was arbitrary and against the laws enacted to curb corruption.

Responding to the plea, the RBI said the decision to enable the exchange of Rs 2,000 notes was taken for operational convenience as the withdrawal is not demonetisation but merely a “statutory exercise.”

In his plea, advocate Upadhyay said he wasn’t challenging the decision withdraw the Rs 2000 notes but the decision to exchange the said denomination without requiring any slip or identity proof. The petition argued that the exchange of currency should only be allowed through bank accounts linked with Aadhaar.

It claimed that the current arrangement would only enable mafia and gangsters like “Atiq Ahmed’s henchmen” and Maoists while arguing that today almost every poor person has a Jan Dhan account and BPL persons are also connected to bank accounts.

A Delhi HC bench of Chief Justice Satish Chandra Sharma and Justice Subramanium Prasad said an appropriate order will be passed on the plea.

Advocate Upadhyay claimed in his public interest litigation (PIL) that the notifications by the RBI and the State Bank of India (SBI) that enable the exchange of Rs 2000 notes without requiring a requisition slip and identity proof were arbitrary, irrational and offend Articles 14 of the Indian Constitution.

The PIL claimed that cash transaction in in high value currency is the main source of corruption and used for illegal activities like terrorism, naxalism, separatism, radicalism, gambling, smuggling, money laundering, kidnapping, extortion, bribing and dowry, etc. and a large amount of the currency has reached either in individual’s locker or has “been hoarded by the separatists, terrorists, Maoists, drug smugglers, mining mafias & corrupt people”.

RBI counsel, Senior advocate Parag P Tripathi argued that the emphasised that the court cannot interfere in such matters and the decision was taken to allow exchange of the Rs 2000 currency note for “operational convenience” as the said banknote is not commonly used and other denominations continue to meet currency requirements.

Advocate Tripathi said that no points mentioned by the petitioner impinge or deal with constitutional issues and as such the court cannot interfere.

On May 19, the RBI had announced withdrawal of Rs 2,000 currency notes from circulation, and said existing notes in circulation can either be deposited in bank accounts or exchanged by September 30.

However, the 2,000 notes will continue to be legal tender, it had said, adding that the notes can be exchanged for other denominations from any bank starting May 23, albeit with a limit of Rs. 20,000 per transaction.

Both the RBI and the SBI issued notifications stating that no requisition slip or identity proof is required for exchanging the Rs 2,000 notes.

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India News

Factually baseless: SEBI on claims of investigations against Adani Group since 2016

The Securities and Exchange Board of India (SEBI) on Monday told the Supreme Court that all claims that the market regulator has been investigating the Adani Group since 2016 are “factually baseless” and one must not jump to “premature and wrong conclusions” in the case.



Adani Group

The Securities and Exchange Board of India (SEBI) on Monday told the Supreme Court that all claims that the market regulator has been investigating the Adani Group since 2016 are “factually baseless” and one must not jump to “premature and wrong conclusions” in the case.

In an affidavit filed in the Apex court, SEBI said that no listed company of the Adani Group was among the list of 51 companies that it had investigated for issuing of Global Depository Receipts or GDRs.

According to the affidavit, filed in response to a plea claiming that SEBI had been investigating the Adani group since 2016 and had opposed a six-month extension to its ongoing probe, the market regulator clarified that the ‘investigation’ “referred to in paragraph 5 of the reply affidavit has no relation and/or connection to the issues referred to and/or arising out of the Hindenburg Report.”

It further said that matter pertains to the issuance of GDRs by 51 Indian listed companies which the SEBI was investigating, adding that no listed company of Adani Group was part of the aforesaid 51 companies.

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The SEBI said that after the completion of the investigation, appropriate enforcement actions were taken. Hence, the claims that the SEBI is investigating the Adani Group since 2016 are “factually baseless.”

The regulator said the six-month extension is to ensure that a thorough investigation is carried out keeping in mind the interest of investors and the securities market.

The Supreme Court had on March 2, directed the SEBI to investigate violations by the Adani Group, if any, before and after the release of the damning Hindenburg report.

The SEBI had been asked to file a report within two months, however, on April 29, the regulator filed for a six-month extension to complete the investigation.

Adani Group endured over $120 billion in market losses- nearly half of the conglomerate’s estimated value—since the damning report released by US short-seller Hindenburg Research.

In its critical report, Hindenburg Research accused the Adani Group of indulging in improper use of offshore tax havens and stock manipulation while also raising concerns about high debt and the valuations of seven listed Adani companies.

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Kerala News

Enforcement Directorate raids Manappuram Finance offices in Kerala

The Enforcement Directorate (ED) today raided the headquarters and offices of Manappuram Finance in Kerala in connection with an alleged money laundering case against the non-banking financial company, reports said.



Manappuram Finance in Kerala

The Enforcement Directorate (ED) today raided the headquarters and offices of Manappuram Finance in Kerala in connection with an alleged money laundering case against the non-banking financial company, reports said.

According to reports quoting official sources, the ED conducted raids at four offices of Manappuram Finance across Kerala, including its headquarters in Thrissur and the home and office of its promoter VP Nandakumar.

They said the raids are part of the central probe agency’s investigation against the financial company for allegedly contravening Reserve Bank of India (RBI) guidelines and collecting public deposits worth over Rs 150 crore, adding that ED—which probes financial crimes—is investigating Manappuram Finance for alleged money laundering and the searches were undertaken to gather evidence in the purported case.

The sources claimed that the ED is looking at gathering documents and recording statements of the company executives in connection with its suspicion that the company has made “large-scale” cash transactions by violating KYC regulation set by the RBI, as per reports.

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They said that the financial crimes’ probe agency is investigating Manappuram Finance for money laundering but it unclear yet if a case has been filed in this regard by the ED.

A response from Manappuram Finance wasn’t available when this report was filed.

Meanwhile, the shares of the non-banking financial company slumped by 10 percent as the news of the ED raids at its premises broke.

Mannapuram Finance, a non-banking financial company with a significant foothold in South India, has been providing a myriad of financial services for the past over thirty years and some of its services including gold loans, housing loans, microfinance, among others.

The company had recently announced that it was considering various options for raising funds through borrowings, including issuing debt securities on onshore and offshore securities markets by public issue, private placement, or through commercial papers.

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