August 19, 2017
Law Firm says that criticism by founders led to CEO’s resignation and this development has caused huge financial loss to investors.
Rosen Law Firm, a US law firm, said it’s preparing a class action lawsuit to recover the losses suffered by Infosys investors following chief executive Vishal Sikka’s resignation.
The firm says it’s investigating potential securities claims on behalf of shareholders of possible “materially misleading business information” to investing public.
On Friday, Vishal Sikka had said he’d step down as CEO after 3 years following a barrage of allegations made against him; including irregularities in the acquisition of Panaya – an Israeli technology firm. The charges were made by Infosys founder N. R. Narayana Murthy, who attacked the Infosys board for failing on the corporate governance norms.
Rosen Law Firm-an organisation that represents investors from across the world, highlighted that Vishal Sikka’s claim that “distractions” over criticism by founders was the primary reason for his resignation from the Indian IT major. The Law firm claimed it was this development that has caused the loss.
The said firm in a statement that on 18th August 2017, Infosys announced the resignation of its CEO ,Vishal Sikka, which came amid criticism by Infosys’ founders of decisions by Infosys’ board including executive compensation & severance payouts.
Vishal Sikka’s resignation letter stated: “Over the last many months and quarters, we’ve all been besieged by false; baseless; malicious & increasingly personal attacks.. This continuous drumbeat of negativity & distractions… inhibits our ability to make positive change & stay focused on value creation.” On this news shares of Infosys fell sharply during on August 18, 2017.”
Infosys shares on the Indian stock exchanges dropped 9.6% wiping out out ₹22,500 crore in market capitalisation on Friday, when the board and Murthy traded charges against each other following Sikka’s exit. On the NYSE, where Infosys is listed, the ADR’s dropped 7.19% as investors looked to exit the company.