Syntel: Super Swaminathan storms out
By Annie the Snoop

Over the last six months, Techgoss had published a series of exclusive reports giving details of all that was happening inside BPO Syntel.  One report showed how that in the recent past Syntel was overly reliant on couple of key clients.  Techgoss had also reported on the exit of the CEO and senior HR people at Syntel.

It seems trouble is stalking Syntel BPO. Ex CEO  Keshav Murugesh's success in lifting Syntel to a firm footing with solid metrics, substantial increase in market capitalization and building an impressive team are being reversed by extensive attrition within the company. It is unfortunate that one of the last few members who could have steadied the Syntel ship and maintained the equilibrium going ahead has left the company. Swaminathan, global HR head of Syntel, served his last day on February 5. In 2005, Swami as he is known affectionately was roped into Syntel by Srikanth Karra, the earlier global HR head. Swami and Srikanth went back a long way since their time in Genpact. Srikanth also pulled in two more colleagues from GE - Ashfaq Ahad who currently leads Syntel BPO - HR and Inayat Harra who quit last year.

What makes this resignation even more worrisome is the reason behind the same. According to sources close the Board, Swami apparently resigned on the grounds of principles citing lack of transparency in information flow. A senior member within Syntel management rang me to say that despite of being elevated to the top HR position, Swami was cut out of the loop in at least one important HR issue. The finer details of ex-CEO Keshav’s dissent and ongoing discussions to quit were hidden from Swami along with future plans made by the Board of Directors.  Swami who has had a stellar career in Genpact and earned the respect of almost everyone in Syntel for his passion found this difficult to absorb. Instead of accepting this like some yes men and carrying on in a puppet position, he did what any self respecting man would do and put in his papers.

Sources say Ashfaq Ahad – one of the top 3 costliest resources within Syntel BPO may exit soon. Syntel BPO is also doing a cost optimization exercise and identifying cost benefit analysis of all its high paying resources. Sources say Ashfaq Ahad; one of the top 3 costliest resources within Syntel BPO, along with many of his highly paid colleagues may be the object of scrutiny in this exercise.

(Techgoss had published the following on Feb 5, 2010)

Syntel: Why Keshav Murugesh left to join WNS 
By Annie the Snoop

Over the last six months, Techgoss had published a series of exclusive reports giving details of all that was happening inside BPO Syntel.  One report showed how that in the recent past Syntel was overly reliant on couple of key clients.  Techgoss had also reported on the movements of senior HR people at Syntel.

Soon after these Techgoss reports were published, Syntel started monitoring all emails and communications to outside parties to identify the leaker.

On Feb 2, Techgoss had reported on how the ex-President and CEO, Keshav Murugesh, left Syntel after all his good initiatives to strengthen and expand the company were blocked a number of times. WNS has snapped up Keshav to head their BPO operations. Keshav Murugesh will start work as CEO and Board Member of WNS on Feb 19, 2010. WNS is among the top 3 BPO’s in India.

Now a source within Syntel tells us the story behind the appointment of new Syntel CEO Prashant Ranade who has been on Syntel’s Board of Directors since 2007. Prashant Ranade served as the President and CEO of Siemens Group Logistics from 2003 to 2006 and on the board of Directors at Dematic till 2007. He is also the founder of Indus Ventures, a strategic consulting firm.

According to insiders, clashes between Prashant and Keshav’s led to the latter’s exit. Prashant and Keshav had a lot of disagreements on how Syntel should be run and its growth strategy ever since Prashant came on board. The issues gradually escalated to a point where Keshav put his foot down on certain issues only to find the Chairman Bharat Desai backing Prashant

The juicy part of the story which the analysts will love to chew on is that Bharat and Prashant go back a long way and have been chums since their IIT days.  Did this personal friendship since IIT days play any role in Keshav finally deciding enough is enough? Bharat thinks very highly of IIT with another IIT graduate Paritosh Choksi also on the Syntel Board.

After the showdown with Keshav, Bharat instructed the CEO’s office to immediately send an email to all employees announcing Prashant’s new role. The manner in which Keshav was shown the door after 7 years of his loyal, selfless service with Syntel is another example of how hard the game in played in the Indian corporate world. There was no proper announcement to employees or a traditional farewell which is usually accorded to senior management who quit Syntel. Folks still remember that Syntel threw a huge party at Renaissance hotel in Powai for Nitin Rakesh, ex CEO of Syntel BPO, on his last day to recognize him for his contribution.

Employees at all levels are mystified and largely hurt by these abrupt changes. Will Prashant rise to the occasion and be able to step into the large shoes of his respected predecessor? The market has a close eye on Syntel. State Street has not renewed their Joint Venture yet.

Watch this space for updates from our Spy at Syntel.

(Techgoss had published the following on Feb 3, 2010)

Syntel: Popular President and CEO leaves on bad terms
By Annie the Snoop

Over the last six months, Techgoss had published a series of exclusive reports giving details of all that was happening inside BPO Syntel.  One report showed how that in the recent past Syntel was overly reliant on couple of key clients.  Techgoss had also reported on the movements of senior HR people at Syntel.

Soon after these Techgoss reports were published, Syntel started monitoring all emails and communications to outside parties to identify the leaker.

On Feb 2, 2010, Techgoss had reported on the sudden and bitter exit of President and CEO Keshav Murugesh whom the markets credit with being the key to Syntel’s recent success.  The exit was so bitter and final that Keshav’s highly regarded personal secretary Reena Rodrigues also went with his. Under Keshav’s watch, Syntel made it to Forbes ‘200 Best Small Companies’.

When Keshav left, a Syntel spokesperson told they media that their President and CEO had left for ‘personal reasons to pursue other opportunities’.  The company quickly named Mr. Prashant Ranade as the new President and CEO.

But my source ‘close’ to the Board rang me to say the ground reality was very different. The scene within the corporate corridors of Syntel gets murkier by the minute. Our source reports that the Syntel boardroom day before yesterday resembled a bloodbath akin to a pack of lions fighting for meat. Never before had anyone witnessed the usually calm, collected, capable and classy chairman Bharat Desai loose his cool. He resembled a mounting inferno, red as beet, and angrier than ever banging his fist on the table and more. The topic of course was Keshav's pending exit from the company following months of active discussions and negotiations with the Board of Directors.

Apparently, Keshav who was promoted to President last year was not pleased with Syntel's pace and style of growth. He tried to change the way of internal functions and strategy after taking the topmost role and was working on the assumption that he would be taking the final call in all decisions. He found himself at odds with Bharat and certain members of the Board who opposed his style and blocked it at every step. After almost 2-3 months of hardcore negotiations, umpteen US visits and endless frustration, Keshav threw in the towel. Incidentally, the entire leadership team of State Street is within Syntel at the moment having their joint venture board meeting for the BPO part of the business.

Bharat wanted Keshav to resign after the Board meeting whereas Keshav was adamant on doing it day before yesterday since it would not make sense for him to attend the meeting anymore. Eventually he had his way and Bharat decided to cut this short. What followed was alarming, shocking and utterly ruthless. Keshav was asked to leave immediately and his laptop and other company belongings were taken over by the administration. The entire global staff in Syntel is in a tizzy over the incident.

Rumors are abound that Keshav is joining a wealth management firm while others say he is joining another BPO company with larger revenues than Syntel. We will report the facts in a few days.

Keep watching this space for updates.