Infosys issues legal notices to media houses

Bangalore/New Delhi: India’s second largest software exporter Infosys Ltd has issued legal notices of Rs.2,000 crore each against at least three publications owned by Bennett, Coleman and Co. Ltd and The Indian Express Ltd, alleging that some articles they had published defamed the company.

Bangalore-based Infosys, which over the past few weeks has faced criticism from analysts and sections of the media on its handling of the search process for its next chief executive amid a top-level managerial exodus, has issued notices against The Economic Times, The Times of India and The Financial Express.

“Infosys has served a notice on The Times of India, The Economic Times and The Financial Express to cease and desist from defaming the company. The notice speaks for itself and we will act on it,” a spokesperson for Infosys said in response to a Mint query.

The Economic Times and The Times of India are published by Bennett, Coleman and Co. Ltd The Financial Express is the business daily of The Indian Express Ltd.

Vaidehi Thakar, director at The Indian Express, declined to comment for this story. Anshuman Sharma, director (corporate legal) at Bennett, Coleman and Co., said the company may respond on Tuesday.

A senior executive at Bennett, Coleman and Co. confirmed receipt of the notice and said that the company would respond to it in due course. “Our stories are factually correct,” said the person, who spoke on condition of anonymity.

In a legal notice sent to one of the newspapers, Infosys asked the publication to retract certain news stories that were written over the past one month and also issue corrigenda on the publication’s websites and print editions.

“We hereby call upon you to forthwith withdraw the defamatory articles from your website and from any other media through which the same has been made available,” said Infosys in the notice, which Mint has reviewed. “We further call upon you to issue necessary corrigenda on your website and on all other media through which you have made the defamatory articles available to all individuals and entities, expressing your unconditional apology for defaming Infosys in the manner brought out herein above, forthwith within 24 hours from receipt of this notice.”

Infosys threatened to initiate legal proceedings, if the demands were not complied with.

“In the event of your failure to do so, Infosys will initiate appropriate civil and/or criminal proceedings against you entirely at your risk, cost and consequences,” Infosys said. “Infosys further makes a claim of Rs.2,000 crore as damages for the loss of reputation and goodwill already suffered through the circulation of the defamatory articles for which you are liable jointly and severally.”

According to people familiar with the matter who spoke on condition of anonymity, Infosys issued notices against The Times of India for four news stories written over the past one month, including one highlighting investor dissatisfaction against Infosys.

Infosys issued notices to The Economic Times for nine articles that have appeared over the past month, including a story on more impending top-level exits at the company while The Financial Express received a notice for two articles that were published recently.

News articles on upcoming exits at Infosys have sparked anxiety amongst company employees in recent weeks, prompting several business heads within the company such as energy and communications head Rajesh Krishnamurthy and Infosys Finacle head M. Haragopal to issue letters to concerned employees, reassuring them that they are not leaving the company.

Finacle is the company’s banking solutions software.

The nominations committee of the board of Infosys is currently engaged in efforts to appoint the company’s first non-founder chief executive, in light of co-founder and chief executive officer (CEO) S.D. Shibulal’s impending retirement. Media reports over the past few weeks have indicated that outsider candidates such as Vishal Sikka, former chief technology officer of SAP AG, could potentially be named as Infosys’s next CEO.

N. Ravi, president of the Editors Guild of India, said the notices sent by Infosys should be considered a subject of public interest.

“Most of it will be fair comment and discussion in the matter of public interest on part of a high profile company which is in the public arena,” said Ravi, who added that he did not have details of the matter.

“If there were factual errors they need to be corrected and conclusions drawn from wrong facts remedied,” added Ravi, who is also editor-in-chief of The Hindu newspaper.