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Infosys seeks shareholder nod to amend Articles of Association

Infosys has sought shareholders' approval to change the company's Articles of Association, which includes a provision for buyback.
PTI Bengaluru February 24, 2017 10:33 IST
PTI

Infosys has sought shareholders' approval to change the company's Articles of Association, which includes a provision for buyback. 

"Power to purchase its own equity shares or other securities by way of a buy-back arrangement has been included and provisions relating to nomination facility for shares by a shareholder have been inserted," the Infosys postal ballot notice, uploaded on the company's website, said. 

The notice also stated that as per article 13, the power of the board to issue shares at a discount has been deleted in line with the Companies Act, 2013. 

"The board has recommended the adoption of new Articles of Association of the company in conformity with the Companies Act, 2013 to the shareholders for approval," Infosys had said earlier in a BSE filing. 

The notice also stated, "No director, key managerial personnel or their relatives are interested in or concerned with the resolution. The Board recommends the resolution set forth in item no. 3 (Share Capital Category) for approval of the members.”

Earlier in the day, media had reported that the widening differences between its promoters and board on a number of issues, had in all likelihood reached a truce on the crucial aspect of capital allocation. 

Infosys, which had liquid assets, including cash and cash equivalents and investments worth Rs 35,697 crore (about USD 5.25 billion) on its books at the end of December 2016, has been under pressure from investors to utilise the amount either through share buyback or generous dividend. 

There were reports that Infosys may consider a Rs 12,000 crore share buyback, but the company has maintained that it "periodically" reviews the capital allocation policy. 

It had added that the management will take a decision on share buyback at an "appropriate time". 

Two of Infosys former CFOs -- T V Mohandas Pai and V Balakrishnan -- recently exhorted institutional investors to raise questions about the huge cash pile on the company's books, saying investors have an obligation to protect their investment. 

The pressure has grown further after Infosys industry peers Cognizant and Tata Consultancy Services announced their buyback offers worth USD 3.4 billion and Rs 16,000 crore, respectively. 

Besides, the Infosys board today also approved the recommendations of the Nominations and Remuneration Committee for revising the remuneration to COO and Whole-time Director, U B Pravin Rao. 

It also sought shareholders approval to appoint D N Prahlad as an Independent Director.