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‘Activism can dent Infosys’ prospects’

IT major Infosys, which recently witnessed a public spat between the founders and the management, has said that activism by shareholders could dent the company’s prospects.

Published: 14th June 2017 12:57 AM  |   Last Updated: 14th June 2017 06:45 AM   |  A+A-

By Express News Service

BENGALURU: IT major Infosys, which recently witnessed a public spat between the founders and the management, has said that activism by shareholders could dent the company’s prospects. In Form 20F submitted to the US Securities and Exchange Commission, it said: “Actions of activist shareholders may adversely affect our ability to execute our strategic priorities, and could impact the trading value of our securities.”

Form 20F is a financial statement submitted by foreign private issuers to the US Securities and Exchange Commission.
Infoys co-founders, led by   N R Narayana Murthy, have been openly criticising the management for the high salaries of top executives, among other administrative decisions. Murthy had also called for “compassionate capitalism” while expressing his dissent with the management.

According to Infosys, responding to actions by activist shareholders can divert the attention of the board of directors, management and employees, disrupting the firm’s operations. “Such activities could interfere with our ability to execute our strategic plan. This may also require us to incur significant legal fees and public relations costs. The perceived uncertainties as to our future direction could affect client and investor sentiment, resulting in volatility in the price of our securities,” the company said.

A senior IT expert, who did not wish to be identified, told Express it’s unusual for Infosys to make such a reference in Form 20F, which is sure to draw attention. “The US economy is very litigious. The moment they draw attention to this, they will create trouble for the company.”



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