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Cognizant president may steer L&T’s IT services business

Date: 29-03-2019
Subject: Cognizant president may steer L&T’s IT services business
BENGALURU: Rajeev Mehta, who will step down as the president of Cognizant  on April 1, may join L&T at a time when the latter has mounted an unsolicited bid to acquire Mindtree, people directly aware of the matter said.

Mehta will serve as an adviser to Cognizant's new CEO Humphries till May 1, announced earlier as part of his exit plan.

Mehta is expected to help the $18-billion construction and engineering conglomerate to chart aggressive growth for IT services units - L&T Infotech, L&T Technology Services, and Mindtree, if the acquisition bid is successful. He is likely to spearhead the combined operations when L&T merges these units eventually, sources said.

Mehta emerged as the top contender after L&T undertook an exhaustive leadership mapping exercise to identify the new face to steer the business, they added. Calls and emails to Mehta remained unanswered at the time of going to press. Queries to L&T didn't elicit any response.

A two-decade-old Cognizant veteran, Mehta was a key figure in former CEO Francisco D'souza's core team which scripted the 2020 strategy. He joined the company when it was barely $25 million and was part of the long growth rally to $16 billion last year. Mehta was appointed as president of the company in 2016 replacing his predecessor Gordon Coburn who resigned from the firm after Cognizant disclosed violations to the US Foreign Corrupt Practices Act(FCPA).

Phil Fersht, CEO of US-based HFS Research, said, "Mehta has lived the whole Cognizant growth story over many years and was widely tipped to take over from D'Souza when he stepped aside. He was known internally as "Frank's right-hand bulldog" -- a toughie, an enforcer, a doer. He has proven operational leadership capability (essential for what LTI/Mindtree needs) and is used tackling the shift from $2 billion to over $10 billion," he said.

Ten days ago, L&T acquired the largest shareholder V G Siddhartha's 20% stake in Mindtree, pitting the four founders in a public fight against the former. L&T has also placed an order with brokers to pick up another 15% of the company shares from the market. In addition, it has announced an open offer for 31% of shares. If successful, the cumulative deal for 66% stake will cost L&T nearly Rs 11,000 crore, or $1.6 billion.

Mehta, who nursed CEO ambitions, was given a substantial increase in his compensation last year, and it was expected he would stay in the company. He got a cash bonus of $1.3 million and restricted stock units of $9 million. In 2017, Mehta's target cash incentive was $535,000 which was double of what its former CEO Francisco D'Souza received that year.

Fersht argued that Mehta would be a terrific choice to lead the merged entity because of his terrific connections, experience and the dedication to ram those two together. "With the mid-caps like Mphasis, Virtusa, Genpact all doing well, there is clear evidence that this merger could be successful, but needs very strong leadership. Raj Mehta must be geared up for a situation he is tailor-made for!" he added.

Source: timesofindia.indiatimes.com

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