Infosys says board member Srinivas resigns

Wed May 28, 2014 9:07pm IST

Employees of software company Infosys walk past Infosys logos at their campus in the Electronic City area in Bangalore September 4, 2012. REUTERS/Vivek Prakash/Files

Employees of software company Infosys walk past Infosys logos at their campus in the Electronic City area in Bangalore September 4, 2012.

Credit: Reuters/Vivek Prakash/Files

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REUTERS - Infosys Ltd president and board member B.G. Srinivas, seen by some investors as a candidate to take over as CEO, has resigned, becoming the latest senior manager to leave India's second-largest software services exporter.

Infosys did not give a reason for his resignation in its statement to stock exchanges. Srinivas, who joined in 1999, will remain in his role until June 10.

Infosys started a search for Chief Executive S.D. Shibulal's successor in April. Shibulal, one of company's seven founders, wants to retire in January 2015 or before, if his successor is ready to take over.

The company, part of India's more than $100 billion outsourcing services sector, has said that it would consider both external and internal candidates for the role.

The possibility of Infosys recruiting a CEO from outside, breaking with its tradition of choosing its chief executive from its founders, has gone up after Srinivas' resignation, analysts and investors said.

"The fact that he has left the company indicates he was no longer in the running for the top job," said Bhavin Shah, CEO of brokerage Equirus Capital. "He was a key person from a client interaction perspective, so it's a big loss for the company."

Srinivas' resignation follows the departure of at least nine senior executives who left since the company brought founder N.R. Narayana Murthy back from retirement to help revive its fortunes in June last year.

Infosys, once a showpiece for India's outsourcing industry, is losing its status as the employer of choice for young IT workers, with staff leaving at an unprecedented pace as the company struggles to regain ground lost to rivals.

Shibulal is one of seven engineers who launched the company in 1981 by pooling together $250, mostly borrowed from their spouses. He is the fourth person from the group to become CEO, and will be the last.

"With Srinivas' resignation, there are not too many high-profile candidates left in Infosys who can replace Shibulal," said Walter Rossini, a fund manager for Gestielle India, which owns Indian shares, including Infosys, worth about $150 million.

"An outsider as a chief executive, who will change the management mentality and bring in a different approach, could be a game changer for Infosys. This is what the company needs."

Infosys' shares in New York were down 3.4 percent at 1530 GMT. The company's India stock ended up 1.3 percent ahead of the announcement on Wednesday, while the main market index closed flat.

(Reporting by Sumeet Chatterjee, editing by Louise Heavens; Editing by Subhranshu Sahu and Louise Heavens)

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