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When it Comes to Hoodwinking i am the Best you find on this Planet ……



NARAYANA MURTHY: When we started Infosys in 1981, we were seven people, and we put together about USD250 at current exchange rates. We were short of money, but we were very long on hope. – on PBS

This down-to-earth man had to mortgage his wife Sudha’s jewelry for Rs. 10,000 to put some funds in the company. – ZDNet India

Established in 1981 by seven professionals who pooled in their savings of Rs 10,000 (borrowed from their wives),…

IN 1981 MURTY WANTED TO START INFOSYS. HE HAD A VISION AND ZERO CAPITAL. . ….Typical of Murty, he just had a dream and no money. So I gave him Rs 10,000 which I had saved for a rainy day, without his knowledge and told him, This is all I have. Take it. – (unofficial) Sudha Murthy

Did the Murthys contribute the entire 10,000 rupees (USD250 at ‘current exchange rates’) or a share of it, at roughly 1,500 rupees assuming equal share among the seven co-founders? And how difficult was it for them to contribute even the higher of these two numbers?

Narayana and Sudha Murthy : Highly paid Professionals

Estimate of their earnings

Narayana Murthy finished his undergraduate in electrical engineering from Mysore University in 1967 and then went on to obtain a master’s degree in electrical engineering from IIT Kanpur. After that he worked at IIM Ahmedabad and then worked for a few years in France. In 1978 he was hired as the general manager at Patni Computers. My conservative estimate of his monthly earning at Patni Computers in 1981, just prior to founding of Infosys, is 6,000 to 8,000 rupees. His wife, Sudha Murthy did her graduate work at the prestigious IISc Bangalore and since 1974 worked for Telco , a Tata company. My conservative estimate of her 1981 earnings at Telco is 5,000 to 6,000 rupees a month.

Estimate of their monthly savings

Assuming gross combined income of Rs 11,000 per month, various deductions at about 3,000 rupees and their combined expenses of 3,000 rupees a month, the net savings comes to about 5,000 rupees a month. This is based on very conservative estimates.

Narayana and Sudha Murthy in the top Tier of Income

In 1981, India’s per capita income was around 1,000 rupees a year. Murthys’ combined annual income of over 100,000 rupees, placed them solidly in upper-upper-middle class – most likely very comfortably in the top one percentile of income brackets.


They seems to have been financially very well-off prior to the founding of Infosys, with the ‘claimed’ seed money of 10,000 rupees just small change for them. All these tales of hardships don’t seem to be true, in my judgement.

Note: A few other hints about how well-off they were. a) After telling us how they spent USD17 on their marriage, and that too with costs split between her and her husband (can’t you see how poor we were? impression creation attempt) in the very next sentence Sudha Murthy casually mentions going to the USA shortly after the marriage where she spent a few months. She forgot to mention the cost for that trip. Just plane fare for a single person would have been a few hundred dollars (about USD1000+?) How many poor Indians can afford to go to USA for personal visit like that. b) Just after start of Infosys they bought a house ‘on loan.’ How many people buy houses after starting up a company which might sqeeze their cashflows and do banks loan them money under such circumstances? c) Mr. Murthy mentioned that how just by chance on a flight that he happened to be sitting next to K.S.N. Murthy of the Karnataka State Industrial Investment and Development Corporation,who expedited his loan approval. I didn’t hear of any poor businessmen starting out a company and flying for their business trips. I have seen them travelling by second class trains, though.

I take pleasure in giving. I feel that I have a reasonably good amount of money for all of which I don’t have much use. So I thought I should share it with my poorer countrymen . – Sudha Murthy, wife of Infosys’ Narayana Murthy

I have always said that the real power of money is the power to give it away. – Narayan Murthy

And then JRD turned almost a soothsayer to say, ‘If you make lots of money you must give it back to society as you have received so much love from it.’ – Sudha Murthy

The vast majority still does not have freedom from hunger, from disease and from illiteracy. Our adult literacy is only 58 percent, 26 percent of the population lives below the poverty line, 24 percent of Indians are under nourished, we have been ranked 127th out of 175 nations in the human development index. Clearly my young friends, we have a long way to go. – Narayana Murthy in a speech at IIT Mumbai

She quotes Thatthareya Upanishad to entreat her listeners to set aside a portion of the income for their educational institution, another for the poor. All this of course, after looking after one’s own family. ‘But draw a line at what you need. Take your partner’s consent. See that you do not make the receiver your dependent. Give as naturally as you eat, sleep or breathe. … But what truly helps is the passion for the work.’ No, no, compassion doesn’t mean tears and talk, she is quick to add. It is not holding meetings and getting your name in the papers. – Rediff on Sudha Murthy

Infosys Foundation: Charity that Sudha Murthy Built

‘Infosys Foundation came into being with the objective of supporting the underprivileged in our society…The Foundation Trustees comprise of Ms. Sudha Murty (an educationist, a writer and a computer engineer), Chairperson; Ms. Sudha Gopalakrishnan and Mr. Srinath Batni (Director, Infosys Technologies Ltd.). The Foundation primarily aims at improving the health, education and basic facilities, benefiting a large number of individuals and institutions.’ ( Infosys Foundation )

Follow the Money at Infosys

Since its inception in 1996, by March 31, 2004 the foundation has given grants totaling about (less than) 40 crore rupees. (From 2000 to 2004 the grant amounts were 2.80, 5.26, 3.75, 5.53 and 12.00 crore rupees respectively). At then end of 2004, the market value of Infosys was over 56,000 crore rupees. It means that it contributed less than 0.1 percent of its market value wealth to Infosys Foundation over the past 8 years.

Murthy family (N.R. Narayana Murthy, Sudha Murthy, daughter Akshata Murthy, son Rohan Murthy) held about 7.5 percent of Infosys shares during this period. It means that their share of grants to Infosys Foundation was about 3 crore rupees (7.5 percent of 40 crores). Similarly, this amount is less than 0.1 percent of their 3,750 crore rupees (6.6 percent) stake in Infosys shares at the end of 2004. ( Warning PDF file (need free Adobe software to read): Murthy Family’s ownership in Infosys Technologies )

Note: For coverage on their almost non-existent contribution to charity from personal funds please follow link titled Charity: Narayana Murthy Style, at the bottom.)

3 Crore Rupees is a Lot, isn’t it?

Note: 100 lakhs = 1 crore. 10 lakhs = 1 million. 1 crore = 10 million. 1 US dollar (during April 2005) = 44 rupees. 100,000 US dollars = 44 lakh rupees. 1 million dollars = 4.4 crore rupees.
Murthy family’s share of contribution to Infosys Foundation over 8 years: 3 crore (rupees) (USD 700,000)
Average over one year: 40 lakhs (USD 100,000)

Rohan Murthy’s Cornell university tuition (one year): 13 lakhs (USD 30,000)
Over 4 years: 52 lakhs (USD 120,000)
Estimated cost of tuition, lodging and boarding over 4 years: 1 crore (USD 240,000)

Akshata Murthy’s Stanford MBA tuition (one year): 18 lakhs (USD 41,000)
Over two years: 36 lakhs (USD 82,000)
Estimated cost of lodging, boarding, tuition : 60 lakhs (USD 130,000)
Estimated cost of undergraduate education (economics) at exclusive Claremont McKenna College, California: 1 crore (USD 240,000)
Total estimated cost of educating Akshita Murthy in the USA: 1.6 crore (USD 370,000)

Median price of a new home in Silicon Valley, USA: 3 crore (USD 700,000)
Median price of a new home in Palo Alto, California (heart of Silicon valley and where Stanford university is located): more than 3 crore( USD 700,000+)
Median price of a new apartment in Manhattan, New York: 5 crore (USD 1,200,000)

3 crore divided by 100 crore Indians: 3 paisas/Indian (0.07 cents) over the last 8 years
Publicity, good will and ego-gratification: PRICELESS (USD PRICELESS)

Cost benefit Analysis of ‘Charity’

Investors: ‘The leading US companies now prefer investing in Indian companies that have defined social responsibility cells.’ – Sudha Murthy, also clarifying that the Infosys Foundation was only active in states where Infosys had set up software development centres. (The Economic Times)

Branding: Helps to attract good employees and keep attrition rate low.

‘Purchasing Goodwill’: Many customers prefer to do business with companies perceived to have social responsibilities. Government officials are receptive to new requests for more land etc.

Association with the famous: They are not going to miss out on associating their names with Tata family or Bill Gates, by mentioning them as often as possible. ‘…When asked by her colleagues as to what she (Sudha Murthy) wanted on her retirement, she could only say: ‘A black and white portrait of Jamshetji Nusserwanji Tata and another of JRD Tata in his famous blue suit.” (from Tata website on Sudha Murthy ) ‘I look forward to meeting him…the last time we met, he enquired how the Infosys Foundation was doing. (Economictimes reporting Sudha Murthy talking about Bill Gates). Oh boy!.

Political and Social Benefits: For Narayana Murthy, a possible President of India or failing that Ambassador to the USA; for Sudha Murthy possibility of becoming a future Prime Minister of India (beating that Hindi-speaking white goddess will be difficult, though. (Future potential fight between Priyanka Gandhi and Akshata Murthy for that coveted position should be interesting.)) or failing that to be simply known as the latest reincarnation of Goddesses Lakshmi, Parvati and Saraswati, all humbly rolled into one.

In summary, for Sudha and Narayan Murthy, ‘charity’ is just a small cost of doing business, with benefits much larger than the costs.

For Murthys Charity Begins at …

Home. (Surprise!)

And ends at … home. (Surprise!)

‘We didn’t want to give it all to our kids and ruin them any more than we have,’ says American Century founder James E. Stowers, who with his wife, Virginia, is No. 5 on our list. ‘If the kids have so much money they don’t even have a reason to get out of bed in the morning, we’re hurting them.’ The Stowers are leaving most of their fortune to the Kansas City (Mo.) medical center they founded. When his children drive by, Stowers jokes, ‘they look at the building and say, ‘There’s my inheritance.” … The six children of our No. 43 giver, Ann Lurie, have rejected many of the symbols of wealth, with a few of them favoring wardrobes from thrift shops. ‘If you saw my children, you would think they needed to be fed or something,’ says Lurie, who has set up foundations in each of their names so they can contribute as they choose. ‘They want to be seen as making their way in the world.’ [BusinessWeek The Top Givers : Today’s philanthropists aren’t leaving the good works to future generations — they’re making their mark now ]

Narayana and Sudha Murthy’s children – Akshata Murthy and Rohan Murthy – need not have any fears that their parent will leave then with almost nothing. At the end of 2004, thanks to homeward charity of their parents, they owned 50.6 and 49.6 lacks shares of Infosys respectively, making each of them worth more than 1,000 crore rupees. Moreover, the rate at which their parents are spending, or better stated – not spending, their assets, they have a virtual assurance that most of their parents money will be theirs after they are gone – currently valued at about 1,700 crore rupees.

Murthy Family Comes Ahead of Charles Feeney

Charles F. Feeney had about USD 1,600 million in assets, Murthy family has about half of it. Difference is that Mr. Chuck Feeney gave away 99.9 percent of it, leaving himself with about the remaining 0.1 percent (USD 1.5 million) ( The Secret Givers : These big-time contributors try to share their wealth while shunning the spotlight ), while Murthy family gave 0.1 percent to Infosys Foundation and were left with the rest 99.9 percent of their wealth (about 850 million dollars or 3700 crore rupees.)

Moreover, while Narayana Murthy was busy lecturing others on virtues of giving and be known as famous philanthropists along with his wife Sudha Murthy, who never missed a photo op to be seen with the underprivileged or with the rich and famous, and made sure her books are donated to libraries and ‘infoscions’ for their character building, Charles Feeney went virtually unnoticed, because he wanted it this way. What a loser!

IIT Accepts Narayan Murthy

I will be reexamining this assertion of not being able to attend IIT because of limited finances.

Is IIT education affordable?

I attended IIT Bombay from 1973 to 1978. To put expense figure in perspective, I will mention that the fresh IIT graduates in 1978 got about 700 to 1600 rupees a month in private sector jobs. After two years of job gross salary of about 1500 was common. High school teachers, made much lower. My mother, who was a teacher in a Kendriya Vidyalaya, I believe, made about 500 rupees a month in 1973.

IIT Expenses

If a decision is made not to attend a boarding school like IIT and instead go to a regional engineering college just on cost factors, it would be instructive to see where the cost could be higher in case of IIT.

IIT Tuition was 25 rupees a semester that was cheaper than 10 rupees a month I paid for my education at Kendriya Vidyalaya. That could not be a factor. Hostel rent was 100 rupees a year. First of all, this rent was below ridiculously low. Moreover, while staying at home might have been free, cost of commuting might have made this number comparable. In my view, it couldn’t be a factor.

Food expense was a problem. Hostel mess service had about 100 to 200 percent overhead. [During lunch and dinner time many workers used to appear mysteriously to partake in the meals then not to be seen till the next meal time. ;}] During the first year of my stay, I used to pay about 90 rupees a month for mess food. I think that similar food at home would have costed about 30 to 40 rupees a month. A difference of 50 to 60 rupees a month could make a big difference to the son of a school teacher. However, I recall a few IITians opting out of mess service. Some good reason for that had to be there, which Murthy obviously did have.

That was at IIT Bombay. Most likely, Narayana Murthy would have gone to IIT Madras. I don’t know about the cost of food there. But, I lived in Madras from 1980 to 1981 working for Larsen and Toubro. I was simply amazed at the low cost of food there. Seems like government had highly subsidized certain basic food. For example, in a decent restaurant near my office, I used to eat a plate of 2 idlis, with sambar and chutney, [still makes my mouth water], for 10 paisas. Masala dosa was relatively expensive – about 40 paisas. I am guessing that at IIT Madras, the difference between cost of eating at a hostel (or even in restaurants) and eating at home would been smaller than was the case for IIT Bombay.


Based on my limited knowledge, I have to say that Narayana Murthy’s claim of not being able to attend IIT because of stated reason of lack of finances does not seem likely. Small difference in cost factors could have been easily met by need-based scholarships given out to most meeting the financial criteria – which he would have met. Small loans were available easily. More likely the reason of Mr. Murthy not attending IIT was the lack of good JEE rank that didn’t allow Narayan Murthy to get in the electrical department, his choice, or similarly competitive departments.

Q: We hear you’ve become quite a philanthropist, that you’re making large donations with money from sales of your personal Infosys stock. Can you tell us about the money you’re giving away?
A: I’m somewhat reticent talking about it. I’d be happier skipping to another topic.
Q: Can you give us an idea of how much it is? Millions? Tens of millions?
A: Well, more, but let me not talk about it. These are topics that are best not discussed. They’re best done. (Note: I made the ‘Well, more’ part bold.)
– N.R. Narayana Murthy in an interview in New York with BusinessWeek editors including International Managing Editor Bob Dowling, Assistant International Managing Editor Christopher Power, and Asia Editor Sheri Prasso. (published in its July 19, 2000 issue)

While he earns the money, I spend it, mostly through the charity. – N.R. Narayana Murthy’s wife Sudha Murthy in a much circulated article.

Murthys and Charity

Earnings vs Wealth

What percent of their wealth they give to charity is a better indicator of people’s generosity than percent of their income. For example, Google’s cofounders are giving themselves US dollar 1 (45 rupees) annual salary; Steve Jobs of Apple computer is getting paid similar amount. (Rest of thousands of crores of rupees they are getting paid or already have in stocks.) Does this mean that when they spend 45 rupees a year on charity, they are great philanthropists because they are giving away 100 percent of their earnings? Of course, not.

Narayan Murthy and Sudha Murthy’s Income

Sudha Murthy’s income (about 50-60 thousand rupees) is spent on their household expenses. Since Infosys is a public company listed on NASDAQ, Narayana Murthy’s income is publicly available. It is around USD 50,000 per annum – or about 23 lakhs rupees. Since Mr. Murthy seems to travel a lot abroad, assuming most of it on his own money, I don’t expect much savings there. Even if I give him benefit of doubt and assume that all of his earnings is spent on philanthropy – 25 lakhs rupees a year, while a big amount for most of us, is small change for a family like Murthy’s with wealth of about 4,000 crore rupees (in form of Infosys shares) at the end of 2004. To put it in proper perspective, just the tuition for their son Rohan Murthy at Cornell (13 lakhs each year) and their daughter Akshata for Stanford MBA (18 lakhs each year ) add up to 31 lakh rupees each year – more than Mr. Murthy’s yearly income. Therefore, I will concentrate on Narayan and Sudha Murthy’s wealth in form of Infosys shares and see how they have contributed to charity.

Murthy’s Wealth

At the end of 2004, N.R. Narayana Murthy held about 20 lakh shares of Infosys, while his wife held 58 lakh share, resulting in a market value wealth of about 1,700 crore rupees. (Akshata Murthy and Rohan Murthy held 50 lakh shares of Infosys each for a total wealth of about 2,200 crore rupees but I will exclude them from my calculations.)

Note: PDF Files: Infosys Share Holdings towards the bottom of page containing small files for each quarter is the main reference for years 2004, 2003, 2002 and 2001.

Murthy Charity in 2005

April 20, 2005. By the end of March 2005, Narayana Murthy and Sudha Murthy haven’t sold a single share from their Infosys holding of about 80,00,000 shares at the end of December 2004, leading me to conclude that the Murthy couple plans to do the same in 2005 what it did in 2004 – that is give more speeches for publicity while doing almost nothing for the poor.

Murthys’ Charity in 2004 from Infosys Shares

N.R. Narayana Murthy’s Infosys Share Holding:

End of December 2004: 19,87,840
September 2004: 19,87,840
June 2004: 19,87,840 (=4 times 4,96,960 for 4:1 stock split)
March 2004: 19,87,840 (=4 times 4,96,960)
December 2003: 19,87,840 (=4 times 4,96,960)

Sudha Murthy’s Infosys Share Holding:

December 2004: 58,18,740
September 2004: 58,18,740
June 2004: 58,18,740 (=4 times 14,54,685)
March 2004: 58,18,740 (=4 times 14,54,685)
December 2003: 58,18,740 (=4 times 14,54,685)

Conclusion: In entire 2004, Narayana and Sudha Murthy contributed zero (0) rupees to charity from any partial sale of their over 1,700 crore rupees wealth in Infosys shares .

Murthys’ Charity in 2003 from Infosys Shares

N.R. Narayana Murthy’s Infosys Share Holding:

End of December 2003: 4,96,960
September 2003: 4,96,960
June 2003: 5,27,900
March 2003: 5,27,900
December 2002: 5,27,900

Sudha Murthy’s Infosys Share Holding:

December 2003: 14,54,685
September 2003: 14,58,685
June 2003: 15,495,000
March 2003: 15,495,000
December 2002: 15,495,000

Murthys did shed a few Infosys shares this year. M.R. Naranyana Murthy reduced his holding by 30,940 shares (5,27,900 – 4,96,960) and Sudha Murthy by 94,815 shares (15,49,500 – 14,54,685). All but 4,000 of this reduction in holding happened in the July to September 2003 period. Share prices on post-split basis varied from about Rs. 800 to Rs 1100 during July to September with still lower prices just prior to this period. In terms of prices prevailing during that period, it comes to about Rs. 3,200 to Rs. 4,400 per share since split ratio in July 2004 was 4 to 1.

Assuming average selling price of about Rs. 3,600, Mr. Murthy reduced his holdings by about 11 crore rupees, and Mrs. Murthy by about 34 crore rupees. How this money was spent, we are not certain. Was it used to help out relatives who surely must be expecting a lot from this couple, or was it spent on educational institutions like the IIT Kanpur, with which Mr. Narayana Murthy has in past and present associated a lot?

IIT Kanpur, IIT Bombay, Cornell?

Thanks to Vinod Khosla’s gift of about 25 crore rupees to IIT Delhi, Narayan Murthy might have had to at least match it in order not to be overshadowed by him. We have read about 25 crore rupees gifted by Mr. Murthy to IIT Kanapur with great fanfare. As Times of India reported: Mr murthy clearly stated, ‘money is not the constraint…take as much money as you want from me…but give all kinds of standard facilities to the students here in my institute.’ Mr murthy said that he was desirous of seeing a separate telephone connection for each student in his hostel room so that communication was no hindrance. (My guess is that ‘the objective is to make sure our institutions of higher learning regain their glory of the ’60s and ’70s’ as told by Murthy to the BusinessWeek in 2000.)

Two other pieces of news caught my eyes. One was the on August 8, 2003, IIT Bombay conferred a Degree of Doctor of Science (Honoris Causa) to him and the citation read by the director of IIT Bombay ‘portrayed him as the leader of one of the most successful business ventures of the country, an entrepreneur, a visionary, and a philanthropist.’ An article on IIT Bombay’s website went on to praise him by stating: He is also a champion of quality, ethical business practices, as well as social commitment, which has earned the respect and admiration of all sections of the community, in India and all over the world. What is the current market rate for a Degree of Doctor of Science (Honoris Causa) from IIT Mumbai, anybody knows?

In the second piece of news, Cornell university mentioned that Keshav K. Pingali, a computer science professor was elected as the India Professor of Computer Science, effective July 1, 2003. It also mentioned that ‘he (Keshav Pingali) is the first person to hold the chair, which has been endowed by an anonymous benefactor of Cornell in India.’ Has Murthy something to do with this annonymous donor. (For those of you who don’t know Murthy was elected trustee of Cornell and his son got admission to its computer science program. By the way a typical endowment of such kind should cost about 10 crore rupees.) Also ‘Pingali earned a bachelor of technology degree from the Indian Institute of Technology in Kanpur, India, in 1978.

How much did Narayan Murthy Give in 2003, 2004

During the entire years 2003 and 2004, except for a few crore rupees that Murthy might have been obligated to pay to academic institutions for things like providing separate telephones connection to students at IITK, there is no evidence that he (or even his wife Sudha Murthy) contributed any significant money to charities for poor people that really needed their money. But those poor people cannot write software, and cannot give back anything to the Murthys except their gratitudes. And who needs that?

What about during earlier periods?

Narayan Murthy hinted (with modesty) to BusinessWeek editors that he has given more than tens of millions they were suggestings. 10 million dollars is about 44 crore rupees – tens of millions is multiple of that – say 100 crore rupees. Did he contribute that much to places like the IIT Kanpur prior to that interview? I doubt very much based on his recent past, their nature of publicizing even very small amounts of giving, and the fact that it is very difficult to hide a large multi-crore rupees gift at places like IIT Kanpur. There is no record of large gifts by ‘annonymous donors’ there. At Cornell university, it is a different matter, if Murthy gave any such gifts or plans to give in future. Discreetly, of course.

According to a message from the Dean of the Faculty of Computing and Information Science of Cornell university ( Cornell gets anonymous gift from India ) Cornell Trustees appointed, effective July 1, 2003, Professor Keshav Pingali, an IIT Kanpur alumnus, to an endowed ‘India Chair,’ provided by an anonymous gift to support Computer Science and to strengthen Cornell’s ties to India. Another Cornell news article stated that ‘He [Keshav Pingali] is the first person to hold the chair, which has been endowed by an anonymous benefactor of Cornell in India. The donor requested that the chair be given to a full professor in early or midcareer and that the holder travel periodically to India to lecture on computer science.’

The minimum endowment level for a full professor is 2 million US dollars (about 10 crore rupees) (See Microsoft Excel file ) This amount will likely be higher for endowment in technical and professional areas like computer science, engineering and business.

Is Narayana Murthy (Trustee, Cornell) this Anonymous Donor

Who could this anonymous benefactor of Cornell in India’ be? There aren’t many families in India that could afford to gift such a large amount. Moreover, this person is likely either an alumni of Cornell or a parent of a child who studied or is studying at Cornell. Furthermore, obviously, this anonymous benefactor is interested in computer science programs at academic institutions. One person that comes to mind is Ratan Tata, head of Tata group. He studied at Cornell about four decades ago; is immensely wealthy and his group’s TCS (Tata Consultancy Services) is India’s biggest software exporter. Or could it be Mr. N.R. Narayana Murthy, co-founder and chief mentor of Infosys Technologies, Bangalore? His family is rich – worth about a billion dollars in Infosys shares. Moreover, Mr. Murthy’s son Rohan Murthy has been studying computer science at Cornell since 2001. In past, Mr. Murthy has given some amounts, albeit with wide publicity, as seems to be the way he likes it, to IIT Kanpur’s computer science department, where he did his master’s showing that he likes to make such gifts.


This faculty appointment was effective July 1, 2003. And so was Narayana Murthy’s election as at-large trustee to four-year term. Coincidenally, the period from July 1, 2003 to September 30, 2003 was the only quarter in 2003 (and 2004) when Mr. Narayan Murthy sold stock from his vast holding of several hundred million dollars worth of Infosys stocks. The market value of the stocks he sold is estimated to be about two million dollars. Details follow.

Narayana Murthy as a Trustee


Cornell’s Trustee Board, vested with ‘supreme control’ over the university, elected N.R. Narayana Murthy to join then beginning July 1, 2003. During 2005, out of 64 voting trustees, only 9 are not Cornell alumni. Out of those 9 – 3 are Ex Officio Trustees (including George Pataki, governor of New York State), two were student-elect and are current students at Cornell, two were elected by the faculty and are residents of Ithaca, NY where Cornell University is located, one is a senior leader of the labor union AFL-CIO at New York (Cornell’s charter requires 2 trustees from labor and I imagine that finding a Cornell graduate in labor is quite difficult), and then there is Mr. Narayana Murthy, chief mentor of Infosys, Bangalore – the only non-resident of New York State and without any apparent strong bond with the university except that his son was studying there. In my view, Mr. Murthy’s situation is quite unusual.

Sale of Infosys Stock

I checked Mr. Narayana Murthy’s share holding in Infosys Technologies, at the end of each quarter of 2003 (and 2004) to get clues about his financial situation. Out of 8 quarters in this period, only during the July 1, 2003 to September 30, 2003 quarter, Mr. Murthy sold some stocks and my estimate of proceeds from that sales is about 2 to 3 million dollars (about 11 crore rupees). I checked Mrs. Sudha Murthy’s stock holdings too, and in her case too, with the exception of a small number of shares sold in the the last quarter of 2003, all the rest were sold in the same time period as that for Mr. Murthy. I estimate her proceeds to be about 8 to 9 million dollars (34 crore rupees). (See my complete analysis in Narayana Murthy’s Charity ) Where did all this money go?

Cornell University?

Frankly, I think only 3 to 4 million of about 10 to 12 million dollar raised by their stock sales went to Cornell. However, it does not mean that this is the end of Murthy’s giving to Cornell. In the message from the Dean of the Faculty of Computing and Information Science of Cornell university (see the top link) it is stated that ‘Still later in March, Cornell trustee Narayana Murthy discussed the idea of a new building for CS with President Lehman, and subsequently President Lehman asked CIS for details on its idea for a new building and a possible ‘information campus’.’

Moreover, Cornell President Jeffrey Lehman and his delegation made a courtsey call to Mr. Narayana Murthy at Infosys in Bangalore in July 2004 during their trip to India. Infosys was the only business organization this delegation visited in India. In Mumbai, Jeffrey Lehman remarked, ‘Even on a first visit, I cannot help but admire the juxtaposition of a rich history and culture with a technology-driven, high-growth economy. We want to work with our friends in India.’ ( Cornell president visits Narayana Murthy (Infosys), IIT Mumbai and IISc Bangalore ) I think that Cornell is for a big kill here and I won’t be surprised if in 2005/2006, Infosys and Cornell announce some joint program named ‘Cornell Infosys Institute of Global Technological Research’ (inclusion of the word ‘global’ is almost certain) with a new building built at Cornell at a cost of around 20 million dollars (100 crore rupees) (all with Infosys’ expenses). Top dogs at IIT Kanpur and IIT Bombay will be handed a few bones so that they don’t complain much. I think Pingli will be used to lure IIT Kanpur toppers to Cornell and stories titled ‘Cornell Ruled by IIT Mafia’ will be planted in India media to make every Indian so proud again.

IIT Kanpur too

Seems to me that most of the remaining funds went to IIT Kanpur (not sure about the timing), (rumored) about 5 million dollars (25 crore rupees) for the construction of a new building, and (confirmed) about 2 million dollars for IIT Kanpur’s Research I Foundation. ‘One of our alumni, Mr. N R Narayana Murthy, Chairman, Infosys, has created the Research I Foundation for the department with an endowment of Rs. 10 crores (2 million dollars).’ Its board consisted of, N.R. Narayana Murthy; Professor Sanjay G Dhande, Director, IIT Kanpur; Head, Computer Science and Engineering, IIT Kanpur; Professor V Rajaraman, Honorary Professor, SERC, IISc ; Professor Rajeev Motwani, Stanford University; Professor Keshav Pingali, Cornell University.

My note: Note the inclusion of professor Keshav Pingali, Cornell University on this board. It is the same Professor Pingali who was elected to the ‘anonymous’ benefactor endowed India Chair at Cornell.

And the Poor?

For the poor of the world: Sorry, they have no money left for you. However, as you know well by now, Narayan Murthy (and of course, divine Sudha Murthy) think of you all the time. Sudha Murthy, especially has been influenced by Tata, Buddha, Gandhi (Mahatama not Sonia), Bill Gates and others. My guess is that after Mr. Murthy’s bank check cleared, he was allowed to speak at Cornell and in his distinguished lecture Thursday, Oct. 16, at Cornell to overflow audience, in one of three Cornell President Jeffrey Lehman’s Inauguration Day lectures, as reported by Susan Lang in her Murthy challenges Cornell to counter corporate greed and address world problems during Inauguration of Jeffery Sean Lehman he stated:

‘The gap between rich and poor countries has doubled in the past 40 years. … There are 1.2 billion people in this world who live in extreme poverty, on income of less than $1 per day. About one billion people lack access to safe drinking water. … Can we be catalysts in wiping the tears off the eyes of the poorest of the poor? Can the Cornell chime bring solace not just to the chosen few on this campus but to a forlorn child in the remote lands of Africa? … How can we address the myriad problems that cripple the development of mankind as a whole?’

Nagawara Ramarao Narayana Murthy like his divine wife Sudha Murthy does strongly believe in giving. Giving speeches, that is.

We are watching the beginning of a beautiful friendship between Mr. Narayana Murthy and Cornell. I will be closely monitoring the developments and will keep you posted

A few well-known quotes:

I have always said that the real power of money is the power to give it away. – Narayan Murthy

The vast majority still does not have freedom from hunger, from disease and from illiteracy. Our adult literacy is only 58 percent, 26 percent of the population lives below the poverty line, 24 percent of Indians are under nourished, we have been ranked 127th out of 175 nations in the human development index. Clearly my young friends, we have a long way to go. – Narayana Murthy in a speech at IIT Bombay

I come from a religious family where education is important, money is not; charity is important, holding is not… – Sudha Murthy

I take pleasure in giving. I feel that I have a reasonably good amount of money for all of which I don’t have much use. So I thought I should share it with my poorer countrymen . – Sudha Murthy, wife of Infosys’ Narayana Murthy

And then JRD turned almost a soothsayer to say, ‘If you make lots of money you must give it back to society as you have received so much love from it.’ – Sudha Murthy

I am trustee of this money and not the owner. I always thought this money belongs to someone else. The money goes to someone else. – Sudha Murthy

Narayana Murthy and the art of hypocritical writing

Infosys chief mentor and chairman Narayana Murthy puts world leaders to shame  in his ramblings about leadership.  In the process, he exposes his own ignorance too. A Dancewithshadows analysis

// //

NR Narayana Murthy, Chairman and Chief Mentor of Infosys Technologies is a highly accomplished man. Even before the dawn of outsourcing, Narayana Murthy set up his own company with $250, with a bunch of friends from office. The start-up went on become one of the largest (not the largest – that slot goes to TCS) IT service companies in India. Its name has spread far and wide. Narayana Murthy and Infosys have won bagfuls of awards for performance. Infosys has fared well on the stock markets too, with rags to-riches-stories of Infosys drivers earning lakhs courtesy stock options. All in all, it’s a glory story. Infosys, the shining pinnacle of Indian corporate excellence. No one disputes any of this.

With success comes hubris. This seems to have hit Narayana Murthy too. One tends to believe that I am successful, so I must be right. Whatever I think, say and do must be right. Because if I was wrong, I couldn’t be successful, my company couldn’t be successful. So I am right. Since I am right, I have a right to lecture the world on what is right. So I write, even if it is trite.

Sorry for the forced rhyming, but this writer, for whom stock option millions is still the stuff of dotcom legend, was taken aback by Narayana Murthy’s ramblings the latest issue of Smart Manager, reproduced by on its website. Narayana Murthy’s article exposes his ignorance and arrogance rather than throwing any fresh light on leadership or corporate management.

The article is pompously named the Essence of Leadership. I don’t blame Narayana Murthy for the pomp. It could have been given by any well-meaning sub-editor who holds Murthy in awe. Or by the man (or woman) who arranged Murthy’s article who wanted to keep him pleased, with an eye on Narayana Murthy’s next gospel.

The article starts off with describing and defining leadership, mostly quoted from Robert F Kennedy and Mahatma Gandhi. Sadly, Murthy has started off on a wrong note. Many of the quotes in his article apply equally well to leaders of the wrong sort, which Narayana Murthy has in mind.

“Leadership is about raising the aspirations of followers and enthusing people with a desire to reach for the stars. For instance, Mahatma Gandhi created a vision for Independence in India and raised the aspirations of our people.”

So did Hitler. Or Chairman Mao.  It is good to use Mahatma’s name to justify your statement. Only, when you take Mahatma’s name, be careful that what is attributed to Mahatma or Martin Luther King does not apply equally well to Adolf Hitler and Vladimir Lenin. But it does. Good leaders need not always be impeccable men. While trying to describe leadership, Narayana Murthy unknowingly puts leaders of all kinds into the same box. He fails to distinguish the ideal leadership strain that he has in mind, thereby putting great names to disrepute.

Leadership is about making people say, ‘I will walk on water for you.’ It is about creating a worthy dream and helping people achieve it.

The statement sounds more out of the Bible than from a corporate leader. Murthy to walk to water? These days, no one walks on water, except small water-borne insects. But surely that is not what Narayana Murthy has in mind. What he has in mind is that the leader should set worthy goals and get his team to reach them. Narayana Murthy uses the wrong metaphor of walking on water. Let me rephrase it for Murthy: The leader should set worthy, practical goals and take the initiative in that journey. That is not walking on water. Suppose Narayana Murthy tells his staffers tomorrow like this: “Guys, we planning to be a $100 billion company next year. Follow me.” Almost as tough as walking on water, I think. Staffers will follow him only till the gate and then flee. They would be convinced that Narayana Murthy has finally lost it.

As this writer sees it: Do not think your employees are dumb and can be taken for any ride (even water ride). They are also thinking individuals. Set practical goals, not dreams that others of relatively less genius can relate to.

“A leader has to raise the confidence of followers. He should make them understand that tough times are a part of life and that they will come out better at the end of it. He has to sustain their hope, and their energy levels to handle the difficult days.”

This statement is fine, since so long, the going has been good for Infosys. Infosys never had two face two successive fiscals of poor revenues to put Murthy’s above statement to test. If Infosys had been significantly hit by the dotcom bust and the meltdown, would Murthy have been able to keep paying his employees the same salaries of the previous days and keep their morale high? I doubt it. Narayana Murthy’s gospel is all fine, since he or Infosys never had to go through the pangs of restructuring and reviving an old economy industry like steel or automobiles.  Things have been good, so I can preach! Normal people and normal companies do not always come out better at the end of tough times – often, they come out pauper.

Murthy moves to Winston Churchill to establish his case of leaders surviving adversities:

There is no better example of this than Winston Churchill. His courageous leadership as prime minister for Great Britain successfully led the British people from the brink of defeat during World War II. He raised his people’s hopes with the words, ‘These are not dark days; these are great days — the greatest days our country has ever lived.’

Winston Churchill successfully led Great Britain through World War II. Unlike Murthy’s, Churchill’s leadership, oratory and depth of knowledge was indisputable. His greatness assumes a bigger glory when we realise that he was under constant attack by critics from within and without, with doubters and warmongers all around. And yet he pulled off the war.

The mistake is in attributing Churchill’s leadership and greatness to his success. In 1942, the Wehrmacht (German air force) pounded British cities with bombs. Japan was running amuck in East Asia. France had capitulated in the first year of the War and De Gaulle had fled. Try as they might, the German navy could not cross the English Channel. Meanwhile, Nazis built the “Atlantic Wall”, a huge fence on the European coast controlled by Nazis to prevent Allied landings. How did they fail then?

Nazis failed due to a multitude of reasons, and the last reason was Winston Churchill. (1) With Pearl Harbor, the US entered the World War and the tide changed in favour of Allies. (2) Hitler, drunk with power, embarked on Operation Barbarossa, the biggest ever military campaign in history to conquer Soviet Union. About 25 million Russians died, but Stalin took the war all the way from Stalingrad (obviously!) to Nazi Berlin. Hitler’s forces bled and perished in Eastern Europe. There were no German resources left to fight Britain. (3) And with Normandy, the Europe’s liberation began, and this was led by the American Eisenhower.

Winston Churchill was a great war-time leader of Britain. But it was not his leadership that won the war. Narayana Murthy falters in attributing Britain’s victory to Churchill’s leadership in adversity. Besides, many of Churchill’s war-time (and post-war) activities have been called into question. When the war began, the Allies were against bombing civilian settlements in war countries. But once the heat built up, the Royal Air Force started destroying German towns with the same brutality as the Wehrmacht. Also, post-war, the role of Churchill and MI-5 in staging the coup of Iran (which dispatched millions of Iranians to the dictatorial clutches of the Shah) is no shining examples which mentor Narayana Murthy should be teaching his wards, right?

Never is strong leadership more needed than in a crisis. In the words of Seneca, the Greek philosopher, ‘Fire is the test of gold; adversity, of strong men.’

This is correct. Jai Murthy. I am waiting for a crisis for Infosys to prove that Narayana Murthy meant what he said.

Compliance to a value system creates the environment for people to have high aspirations, self esteem, belief in fundamental values, confidence in the future and the enthusiasm necessary to take up apparently difficult tasks. Leaders have to walk the talk and demonstrate their commitment to a value system.

Excellent. One wonders why then there was no Phaneesh-Murthy like scandals in Tata Consultancy, Wipro or Satyam. I fail to understand the “values”, “esteem” and “aspirations” that Narayana Murthy talks about. Compliance to a value system may have its positives, but if you end up with a a jerk in your company, its your mess to handle, boss.

As Mahatma Gandhi said, ‘We must become the change we want to see in the world.’ Leaders have to prove their belief in sacrifice and hard work. Such behavior will enthuse the employees to make bigger sacrifices. It will help win the team’s confidence, help leaders become credible, and help create trust in their ideas.

Back to poor Mahatma. He would be turning in his grave hearing all this, had he not been cremated. Please note Murthy’s “sacrifice” part. We will come to it soon.

Investors respect such organisations. Investors understand that the business will have good times and bad times. What they want you to do is to level with them at all times. They want you to disclose bad news on a proactive basis. At Infosys, our philosophy has always been, ‘When in doubt, disclose.’

Narayana Murthy here is talking only about long-term investors, like himself. The rule is not applicable to small investors who want to buy, sell, move on. Perfect investors know that for a good company, good times will follow bad times. Most ignorant investors – the type who sell in a panic when prices are falling – don’t have a clue, and there are many of them around. Good times and bad times are not the sole criteria defining the Infosys stock price. Global market indices like that of the Nasdaq have a significant bearing on Infosys’s day-to-day stock price. Narayana Murthy is more aware of this than you or me, but he refuses to disclose that!

At Infosys, we have consistently adopted transparency and disclosure standards even before law mandated it. In 1995, Infosys suffered losses in the secondary market. Under Indian GAAP (generally accepted accounting principles), we were not required to make this information public. Nevertheless, we published this information in our annual report.

Meaning: We are holier than thou. And since we are the best and me its chief mentor and chairman, I am right. Better listen to me.

Now comes an interesting note. Please recall the sacrifice part in an earlier para while reading this. Read carefully, read every word:

We have gone towards excessive salaries and options for senior management staff…..Senior management compensation should be reviewed by the compensation committee of the board, which should consist only of independent directors. Further, this should be approved by the shareholders. I’ve been asked, ‘How can I ask for limits on senior management compensation when I have made millions myself?’ A fair question with a straightforward answer: two systems are at play here. One is that of the promoter, the risk taker and the capital markets; and the other is that of professional management and compensation structures.

And the reason?

One cannot mix these two distinct systems, otherwise entrepreneurship will be stifled, and no new companies will come up, no progress can take place. At the same time, there has to be fairness in compensation: there cannot be huge differences between the top most and the bottom rung of the ladder within an organisation.

Translation: Senior management’s salaries will be always under the microscope. Not mine. I am part of a different system and a higher caste of entrepreneurs. Let the shudras be shudras and the brahmins be brahmins. If you challenge my millions, entrepreneurship will crash-land, companies won’t start up, progress will be stunted. I’m keeping my millions not for myself, but in the larger interest of entrepreneurship and economy. The above-mentioned sacrifice does not apply when I am the promoter. I am the Essence of Leadership.

In conclusion, keep in mind two Sanskrit sentences: Sathyannasti Paro Dharma (there is no dharma greater than adherence to truth); and Satyameva jayate (truth alone triumphs). Let these be your motto for good corporate leadership.

May be few Infoscions (what a lovely name!) know that Narayana Murthy worked with a little-known company called Patni Computer Systems before he started Infosys. Narayana Murthy did not just leave Patni, he practically broke its back by walking away with its best talent. Rajendra Patni took long to recover from the shock.

Swearing by truth an is excellent parting shot, Mr Murthy. A few years back, I had to go to a wicked real estate agent, whose office had a poster which loudly proclaimed HONESTY IS THE BEST POLICY. He advised me on ways by which I could hoodwink the house-owner. Narayana Murthy’s article on the essence of leadership reads just like that.


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Written by vasuudev

May 28, 2009 at 4:11 pm

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