Weekly roundup (June 9-14): News you cannot miss
<2 Infosys directors in race for CEO's post in iGate </</p>
The return of NR Narayana Murthy as executive chairman of Infosys is causing heartburn among CEO-hopefuls, two of whom have begun searching for greener pastures, Economic Times reported. Infosys board members BG Srinivas and Ashok Vemuri, who are in queue to succeed Chief Executive SD Shibulal when his term ends in early 2015, are learnt to be in serious discussions with a headhunter who has the mandate to find a CEO for iGate Corporation, according to at least three people familiar with the development. Besides Srinivas and Vemuri, executive search firm Russell Reynolds Associates is in talks with Girish Paranjpe, a former co-CEO of Wipro, India's third-largest IT services company. Reuters reported separately that former CEO Phaneesh Murthy was removed by the shareholders for 'cause' from the iGATE Corp board by written consent in lieu of a meeting. Murthy's removal will be effective from June 7, 2013.
The promoters of Yes Bank Ltd, India’s fourth largest private sector bank by assets, may be set for a battle in the courts over the appointments of directors since Madhu Kapur, wife of the late promoter Ashok Kapur, is unlikely to succeed in stalling their nominations through a postal ballot, said two people close to the development. “We know that we will not be able to swing this vote. Yes Bank has enough shareholders, not to forget their company staff with employee stock options who will not go against their boss and, hence, have gone to court. Ultimately, the court order will have to be adhered to,” said one of the people who is authorized to speak on behalf of the Madhu Kapur group. Both the people declined to be named.
A not-so-good placement year, coupled with fee increase at many management institutes, could keep many MBA aspirants away from appearing at the Common Admission Test (CAT) this year, Business Standard reported. Management entrance training institutes say they expect a 5-7 per cent drop in the number of CAT enrolments this year. The admission season for test preparation institutes is between May and August.
<‘Forbes India’ editors sacked for demanding stock ownership</</p>
The last thing Forbes India Editor Indrajit Gupta expected to hear was that he was redundant. But that is what he was told by two people from the editorial and management of the Network18 group on May 27 when they offered him a severance plan which he refused to accept without having a discussion with his lawyers. But that request was summarily rejected, and when Mr. Gupta refused to resign, he was dismissed without assigning any reasons. Mr. Gupta told The Hindu on Saturday that after him, Managing Editor Charles Assisi was forced to quit and the next day two others, Executive Editor Shishir Prasad and Director (Photography) Dinesh Krishnan met with the same fate. Mr. Krishnan and Mr. Prasad were told to sign letters absolving the company of all its dues in the form of Employee Stock Ownership Plan (ESOP) and they would be offered a new value ESOP scheme, the details of which would be made available at a later date. Not willing to accept this opaque arrangement, both Mr. Prasad and Mr. Krishnan were forced to resign.
Evalueserve, a research and analytics company, today said it will set up a knowledge centre in North Carolina, US in September this year, PTI reported. Evalueserve plans to hire 400 researchers and data scientists for this centre by the end of 2017, the company said in a statement. The addition of this research and analytics centre will further strengthen the company's strategic positioning as a global knowledge partner, and will help it serve its clients in North America more effectively, it added.
The Reserve Bank of India (RBI) has imposed penalties on Axis Bank, HDFC Bank and ICICI Bank of Rs 5 crore, Rs 4.5 crore and Rs 1 crore respectively for violation of anti-money laundering norms, Times of India reported. Noting that no money laundering appears to have taken place, RBI on Monday said that a conclusive inference can be drawn only by an end-to-end investigation by tax and enforcement agencies.
In job market parlance, the April-June quarter is usually considered springtime: the appraisal cycle is done and it's the beginning of a new financial year. But this year, half-a-dozen staffing and placement firms say winter just refuses to go away, Economic Times reported. “In the first quarter, we generally see a 15-20 per cent growth, but this time we are flat. We are not bullish at all about the next few quarters and there is no indicator to say things will be better. We should gear up for jobless growth as both replacement and new hiring has stopped,” says Shiv Agrawal, managing director for ABC Consultants.
The Bombay high court on Monday directed Yes Bank Ltd to consider Shagun Kapur Gogia, daughter of late co-founder Ashok Kapur, for the position of a director on its board, Mint reported. The order is a setback for Yes Bank managing director and chief executive Rana Kapoor, who has been resisting giving her a board seat. The board, earlier scheduled to meet on 24 July, will now meet on 27 June as directed by the court. The high court also said the appointment of new directors on the bank’s board will be subject to its final order. The case will come up for hearing on 1 July.
Employee engagement and cultural alignment are the top human resource-related factors that Indian companies use to measure whether the purpose of an acquisition has been achieved, according to a study by consulting firm Aon Hewitt, Mint reported. In this context, Indian companies significantly differ from their global counterparts who look at talent retention and enhanced productivity to measure deal success.
Staffing and human resources solutions firm Randstad India on Saturday announced the appointment of Moorthy K. Uppaluri as chief executive officer (CEO), Mint reported. Current managing director and CEO E. Balaji has decided to step down to pursue other career opportunities outside the organization, a company release said.
India’s job market is bearing the brunt of a slowdown in the broader economy. The hiring environment continues to be weak in all major sectors, with too much improvement unlikely in the coming quarters, surveys by leading headhunters have found. This was reported by Hindustan Times. India’s net employment outlook — an indicator of recruitment intentions — stood at 18% for the third quarter (July-September) of 2013 against a year ago, according to a Manpower Employment Outlook Survey of 5,265 staff.
Infosys has hired executive search firm Egon Zehnder for a "global mapping exercise" to identify and shortlist possible external candidates who could be considered for the position of chief executive officer, two persons aware of the development told Economic Times. While this does not mean the next Infosys chief executive will be an outsider, it does signal that a succession planning exercise has been put in motion at India's second-largest software exporter, which has been drawing flak from critics for underperforming the industry.
The Central Bureau of Investigation (CBI), which is probing alleged irregularities in the allocation of coal mines, registered a criminal case against Jindal Steel and Power Ltd (JSPL) and its promoter and Congress parliamentarian Naveen Jindal on Tuesday, sending the company’s stock tumbling to a four-year low, Mint reported.
The Andhra Pradesh high court on Tuesday endorsed the merger of software services firms Satyam Computer Services Ltd and Tech Mahindra Ltd, removing the final hurdle in the union of the two companies that will produce the sixth largest entity in India’s information technology (IT) industry, Mint reported. The ruling ends a 8-month-long legal battle waged by parties that claimed to be unsecured creditors and a clutch of minority shareholders of Satyam who challenged the company’s merger with Tech Mahindra, which bought the Hyderabad-based firm in April 2009 at an auction overseen by government-appointed directors.
Flipkart Online Services Pvt. Ltd is struggling to retain senior and middle managers at a crucial stage in the company’s efforts to maintain high growth while shifting its business model, Mint reported. At least seven senior and mid-management executives have quit the e-commerce firm in the past four months, according to two people with direct knowledge of the matter. Rajesh Choudhary, vice-president, finance; Aswin Chandrasekaran, head of Flipkart’s books business; Ashok Banerjee, vice-president, engineering; have resigned, the people said, requesting anonymity.
Global rating agency Fitch Ratings offered India relief from a flood of bad tidings—a depreciating rupee, weak factory output data and sticky retail inflation—by upgrading the country’s sovereign credit outlook to stable from negative, Mint reported. The upgrade came on a day the Central Statistics Office (CSO) released data showing a continued contraction in mining output and almost flat electricity production, which limited factory output growth to 2% in April compared with a revised growth of 3.4% in the previous month.
Foreigners working across India and domestic employees with a basic monthly pay of up to Rs 6,500 may see a dip in their take-home salaries if the law ministry agrees to a plan to club allowances with basic pay to calculate the Provident Fund dues, Economic Times reported. The labour ministry has sought the law ministry's opinion on a circular issued by the former central PF commissioner RC Mishra on his last day in office on November 30, 2012.
Wipro Ltd has hired former Lloyds Banking Group executive Ganesh Balasubramanian to create a new unit focused on banking products and platforms, as part of a move to shore up its banking and financial services business that has lagged rivals such as Tata Consultancy Services Ltd and Cognizant Technology Solutions Corp, Mint reported. India’s third-largest software exporter, which recently hived off its non-information technology business units and started trading as a standalone IT stock, has named Balasubramanian as senior vice-president of its newly created banking products and platforms business, according to people familiar with the development who requested anonymity.
Infosys is creating a mini CFO structure that gives greater autonomy to finance heads within business units (BU, Economic Times reported. The mini CFOs attached to the BUs act as finance controllers complying with the framework set by corporate finance. The new structure follows the appointment late last year of Rajiv Bansal, 41, as CFO. Bansal took over from V Balakrishnan, who moved to head the India and BPO operations. The structure was expected to go live in April but will now be rolled out in the next few months.
The Tata group has held talks with former defence secretary Vijay Singh on joining the board of the holding company Tata Sons, a person with direct knowledge of the development told Economic Times. Sixty-five-year old Singh is a well-regarded former bureaucrat who quit as member of the Union Public Service Commission in January this year, even though his tenure did not end till July. He served as defence secretary between 2007 and 2009, and as secretary, ministry of road, transport and highways, and chief secretary to the government of Madhya Pradesh.
Infosys Ltd and Wipro Ltd on Thursday announced high single-digit salary increases for employees, in a year when the software exporters lagged average sector growth rates and disappointed investors. Infosys, India’s second largest software exporter, said it will raise annual salaries for employees in India by 8% on average from 1 July. Salaries at Wipro, the country’s third largest software firm, will increase by 6-8%, effective 1 June. Wipro has increased average salaries for on-site employees by 2-3%, also effective 1 June. For high performers, Wipro said it has “awarded double-digit hikes”.
Aviation industry veteran Gary Kenneth Toomey was today appointed by Jet AirwaysBSE 6.24 % as its new Chief Executive Officer, nearly two months after the airline's deal with Gulf carrier Etihad. The appointment followed the resignation of Nikos Kardassis on June seven after he served two terms as CEO between 1993 and 1999 and again from October 2009 till May 2013. Toomey, 58, an Australian national, has previously served as President and CEO of the Air New Zealand Group and CEO of Airlines PNG in Papua New Guinea during periods of their major expansion.
Wipro Ltd’s billionaire founder Azim Premji and chief executive officer (CEO) T.K. Kurien both got a raise in annual compensation in a year during which the company posted sluggish growth and fell further behind rivals Tata Consultancy Services Ltd (TCS) and Cognizant Technology Solutions Corp. For the 2012-13 fiscal year, executive chairman Premji’s total compensation—including allowances, commissions from variable pay and other long-term benefits—nearly doubled to $733,827 (around Rs.4.29 crore) from $388,702 in the previous year, according to regulatory filings to the US Securities and Exchange Commission (SEC).
International Business Machines Corp. (IBM) began cutting US jobs on Wednesday as part of a plan announced in April to spend $1 billion globally to trim its workforce, a person familiar with the move told Bloomberg. The reduction will target employees with a range of seniority, from rank-and-file workers to executives, said the person, who asked not to be named because the information is private. Some US employees began to receive notifications of the cuts last night, according to Lee Conrad, a coordinator for Alliance@IBM, an employee group.
PeopleStrong, a leading platform based multi-process HR outsourcing company, has received an equity investment from HDFC Holdings, a wholly-owned subsidiary of HDFC, and Lumis Partners, a private equity fund based out of Gurgaon, the company said in a press release. The amount was not specified. “HR is increasingly becoming the cornerstone of successful businesses” says Deepak Parekh, Chairman, HDFC Ltd. “We are happy to be a part of their journey and wish them success for their future growth.”