U. B. Pravin Rao has been appointed interim chief executive officer and managing director.

Vishal Sikka, CEO and managing director of Infosys, resigned on Friday citing what he termed “baseless, malicious and increasingly personal attacks” by the founders of India’s second-largest software services exporter, led by N.R. Narayana Murthy, that had constrained his ability to bring about change.

The news of Mr. Sikka’s departure, just a little over three years after the former SAP AG executive took the helm vowing to turn around the company’s then sagging fortunes, sent the company’s shares plummeting 9.6%.

Mr. Murthy, co-founder of Infosys, had over the past couple of months raised issues of corporate governance and salary increases paid to Mr. Sikka and chief operating officer U.B. Pravin Rao. Mr. Murthy had also sought that a probe report on alleged irregularities over the $200 million acquisition of cloud solutions start-up Panaya, be made public.

Also Read Resignation letter of Vishal Sikka

‘False and baseless’

“Allegations ... have been repeatedly proven false and baseless by multiple, independent investigations,” Mr. Sikka said in a statement announcing his decision to step down from the top job at the Bengaluru-based company.

“But despite this, the attacks continue, and worse still, amplified by the very people from whom we all expected the most steadfast support in this great transformation. This continuous drumbeat of distractions and negativity over the last several months/quarters, inhibits our ability to make positive change and stay focussed on value creation.”

“Addressing the noise by itself is damaging; hundreds of hours of my own time has gone into this recently,” he said. “But the structural challenges this engenders within the organization has a very damaging effect on our ability to carry out any kind of transformation, especially one that is as fundamental as transforming from a cost-oriented to an innovation-oriented value delivery to clients.

“Therefore, I have come to this moment and the end of this journey. The whole day [Friday] has been like sort of a blur,” Mr. Sikka, 50, said. “I have no plans. I am yet to decide what to do next.”

Also Read The new Sikka at Infosys

Infosys’s board accepted Mr. Sikka’s resignation “effective immediately,” co-chairman Ravi Venkatesan told reporters. Mr. Sikka had agreed to continue as executive vice-chairman and would hold office until a new permanent chief executive officer and managing director takes charge, which should be no later than March 31, 2018, R. Seshasayee, chairman of the Board, said.

Mr. Sikka’s decision brings “a long drawn out boardroom battle to a close,” V.K. Sharma, head (PCG) at HDFC securities, said. “While the company did better than the industry during his tenure, it was nowhere near achieving Sikka’s own $20 billion target by 2020. The forthcoming buyback may belay the stock from falling more.”

“Sikka’s allegation that he was continuously being distracted does not wash as he had a long-enough honeymoon period to make his mark,” Mr. Sharma said.

The Stanford-educated Mr. Sikka would continue to focus on strategic initiatives, key customer relationships and technology development and Mr. Rao had been appointed interim CEO and MD reporting to Mr. Sikka under the overall supervision and control of the board, Infosys said.

Mr. Sikka would receive an annual salary of $1 during his tenure as executive vice-chairman.

Also Read What next for Infosys?

Any company equity awards held by Mr. Sikka that remain outstanding and unvested shall, during his term as executive vice-chairman, remain outstanding and shall continue to vest (and, in the case of stock options, become exercisable) in accordance with their terms.

Challenging time

The board had mandated the chairman and the Nomination and Remuneration Committee to expeditiously identify and select a permanent CEO and managing director, according to the statement. “This is the most challenging time in the history of the company,” Mr. Seshasayee said. “There are moments when changes become unavoidable. I hope a new path will emerge and we will do what it takes to get the right kind of leadership.”

“The next CEO must buy into the vision and strategy of the company and be a people-oriented person. The CEO must integrate and mould the strong culture of the company wherever it is necessary,” he said.