TV Mohandas Pai quit because of internal squabbles and not, as he said, because he wants to serve the country. Moneylife pieced together the picture from circles close to the company
Moneylife Digital Team
Given that the wealth of all its promoters remains substantially locked in the company, team Infosys puts on a strong united front, so as not to rattle investors or destabilise the stock price. This was evident in TV Mohandas Pai's larger than life presence at all the media interactions that followed the announcement of his exit plans and the company's worse-than-expected financial performance.
The media savvy Mr Pai asserted that he was only quitting to serve the nation and "to give youngsters a chance", but it wasn't quite convincing. Mr Pai claimed, according to a report in a national daily, that NR Narayana Murthy had offered him the CEO's job nine months ago, but he didn't take it. Soon after, embarrassingly, Mr Murthy, while heaping praise on Mr Pai, clarified that he had "not offered him any position" because he had "no locus standi to offer anybody a position in Infosys".
But is it merely "pique" at not getting the top job? Well, a day after the results, Mr Pai seems to have admitted as much. The Indian Express (19th April) quoted him as saying that he "does not agree with founder NR Narayana Murthy's principle of rewarding seniority instead of picking the best person to lead the company". Mr Pai, who apparently, believes he is best placed to head the company said, "What goes against me? Seniority. You are discriminated against because the founders have spent longer years," he told the newspaper, converting the battle as one between "founders" and "professionals".
Sources close to the company's top team, however, have a different view. They say that contrary to the public perception of strong unity, or the claim of "no discord" at the top, there were two clear camps at Infosys-one had Krish (S Gopalakrishnan) and S D Shibulal, while the other had the brash Mohandas Pai with Narayana Murthy and Nandan Nilekani as his backers. They say "with Murthy set to leave and Nandan already out, the writing on the wall was pretty clear because Krish strongly backed Shibulal as his successor. So Mohan would either have to go or be rather uncomfortable under the new dispensation. All he has done is to quit a little before (Mr Pai's resignation is effective 11 June 2011) Murthy's term ends in August".
In effect, the perception that Mohandas Pai quit out of "pique" and is "devastated" at parting from Infosys seems fairly accurate. On the other hand, K Dinesh, another founder-director also announced his exit, to coincide with the March-end results, but since he played no role of any substance, his departure will go largely unnoticed.
Significantly, there are no reports of S Gopalakrishnan lamenting Mr Pai's departure; instead, his matter-of-fact comment was that it "would not impact the firm as it has experience in transitioning leaders". Given how the capital market has reacted, Mr Gopalakrishnan and Mr Shibulal will have to work hard and prove themselves, or it will affect the founders' wealth as much as those of the public shareholders who swear by the company.
The internal assessment about the media savvy Mr Pai is also rather different from the public image he has cultivated. His 17-year association with Infosys, without direct responsibility for sales and performance, has also allowed him to occupy several public positions that hardly come the way of corporate directors. For instance, he must be the only professional director who was on the board of the Securities & Exchange Board of India (SEBI) and his role in helping former chairman CB Bhave in a sticky situation has been fairly controversial. Internally too, as the blog www.techgoss.com (by Bala Shah) notes, he was seen as abrasive or "cold and ruthless", in contrast to his genial and benign external image. Way back in January 2010, the blog had written about how Mr Pai was positioning himself to becoming CEO after Mr Nilekani.