Rajiv Bansal: Infosys moves Sebi to settle ex- CFO payout row
BENGALURU: Infosys has submitted a settlement application with the Securities and Exchange Board of India (Sebi) following the market regulator’s inquiry into alleged inadequate disclosures and procedural lapses in the severance agreement with former CFO Rajiv Bansal.
In a filing with stock exchanges in India, US and Europe, Infosys said it wants to resolve the allegations about not seeking prior and separate approval of the nomination and remuneration committee and the audit panel of the company in relation to the severance agreement, as also relating to disclosures pertaining to the same pact, cessation of severance payments, and initiation of arbitration under the agreement.
The settlement application appears to be an effort to iron out all regulatory bottlenecks before the new CEO, Salil Parekh, takes charge in January. Infosys said the settlement application process is based on an undertaking that the company would “neither admit nor deny the finding of fact or conclusion of law”.
The issue relates to the time when Bansal was leaving the firm in 2015.
Infosys then had agreed to pay him Rs 17.38 crore as severance, the equivalent of 24 months’ pay. Subsequently, it disbursed only Rs 5 crore and halted the remaining payment on the grounds that Bansal had not stood by some of the conditions he was obliged to. Some whistleblowers had alleged that due process was not followed in the approval of the severance pay and that timely disclosures were not made. Co-founder N R Narayana Murthy highlighted these allegations at the time, and had gone so far as to say that the payment may be viewed by some as “hush money”.
Earlier this year, Bansal invoked his rights to an arbitral tribunal on the issue of the company holding back most of his severance pay.
Corporate lawyers that TOI spoke to said the settlement application would have been made under the Settlement of Administrative and Civil Proceedings Regulations of 2014. The settlement can include monetary or non-monetary terms. The former will be a minimum of Rs 2 lakh. The latter can include major actions such as voluntary suspension of certificate of registration, or closure of business for a specified period. It can also include actions like removal from management and debarment of certain individuals from acting as a partner or officer, or directions relating to internal audit and reporting requirements. The actions will take into consideration the conduct of the company during investigation, nature and impact of the alleged defaults, and the extent of amount of harm and/or loss to investors, and/or gain by the applicant.
Infosys’ investigations into the issue — conducted by third parties — found no wrongdoing. And the new Nandan Nilekani-led board has stood by the findings of the investigation.
The company said it would provide an update on the settlement application upon completion of the process.