Lessons from Infosys' half tussle

Putting to rest the buzz about a Bombay House-style mutiny, Infosys promoters and the Board have openly buried the hatchet. After the initial brouhaha, nobody wanted to wash their dirty linen in public any more. Nevertheless, the allegations of hush money for former CFO amounting to an astronomical Rs17.5 crore, chartering a private jet to California, appointment of a Union minister's wife on the Board, higher salaries and performance-linked bonuses for its CEO have literally stunned India Inc. Stunned because these were so insignificant in their view.

By Mumbai's standards, the issues raised by the Infy promoters were only worthy of a coerced laughter at a Board meeting. Many have wondered how promoters could even raise such issues deceptively sheathed in profound verities, and wreck their own companies. In the land of money laundering, insider trading, and under/over invoicing of traded goods, the Infy issues are "too tiny" to bother a busy Board. After all, corporate governance issues are for proxy advisory firms or disgruntled elements in the management to raise, and surely, not promoters. Right?

Long after the CBI cautioned the government that big corporate houses are using `front' companies abroad to illegally re-route huge sums of money, we are yet to initiate any action. On the flip side, several cases are still pending a settlement under the consent mechanism instituted by the stock market regulator. Ghosts of crony capitalism have continued to thrive in the corporate world.

Does the Infy tussle point to the 'ethical' differences that Indian cities have? Big corporate houses, especially those headquartered in Mumbai and New Delhi, don't seem to believe in frugality, and rather indulge in opulence. Even start-ups do not consider `scrimping and saving' a way of their life. Owning an aircraft or a foreign-built yacht is no longer a luxury for top corporate honchos in Mumbai. This is true even when it comes to corruption. An inconsequential Rs 10-20 crore of fund appropriation or unexplained money trail does not make headlines because it is considered "foolish" to go after such "peanuts" when there are bigger gains.

Probably, Bengaluru, still trapped in the typical economy class, consciously stays away from the splendor. Barring a few Mallyas, most companies are rooted in simplicity. Most tech companies, including Infosys, are not used to the high life that is associated with the American tech giants such as Google, Microsoft and Apple.

For its `middle-class' promoters, Infy is still a fledgling start-up, staring at the suddenly disappearing earth beneath its feet. They just can't forget that they built the company with their sweat and blood; economy flights, and even trains, and shared apartments are still afresh in their minds. Can the new management discard all these rags-to-riches stories and move in like neo-rich? The debate may have withered before it bloomed, and the Board, insisted that there was no impropriety, but it accepted that they made a judgment error in the case of severance package due to a subjective element that guided the process. The Board, which acted as a two-way bridge between the owners and the management, and the promoters have reminded India Inc of a few lessons. Lessons in frugality and ethics, rooted in existentialism.