By SM.18 Sep, 2018
Infosys said on Monday that a tribunal has ruled in favour of ex-chief financial officer (CFO) Rajiv Bansal"s severance package, rejecting the company"s claim for a refund. According to the arbitral tribunal"s order, the IT company is now required to pay Bansal the outstanding severance amount of Rs.12.17 crore along with interest. The move comes after co-founder NR Narayana Murthy had last year, in a public spat, questioned the heavy package approved to Bansal by the then management led by Vishal Sikka, who was at the time the chief executive officer (CEO) and managing director.
"While the award acknowledges that Infosys had bona fide disputes, its" counter claim for refund of previously paid severance amount of Rs. 5.2 crores and damages, has been rejected," Infosys said in a regulatory filing with the Bombay Stock Exchange (BSE).
The arbitral award, however, is confidential, said Infosys, the country"s second largest IT services exporter.
Infosys will take legal advice for necessary actions to be undertaken in respect of the award, it said.
At 1:14 pm, Infosys shares traded at Rs. 721.80, up Rs. 4.75 or 0.65 percent on the BSE.
The severance package of Bansal, who resigned as CFO in 2015 - amounted to Rs. 17.38 crore, equal to 24 months of pay.
Out of the total Rs. 17.38 crore, Infosys paid Bansal Rs. 5 crore only. The subsequent payments were suspended after Murthy and others objected to the severance package, terming it as excessive and that that it could be seen as "hush money".
Bansal then dragged Infosys to arbitration to claim the remaining Rs. 12 crore. The company had said at the time that the payment includes non-compete obligation, including other rights and obligations.
Murthy had repeatedly raised issues of corporate governance at the company that he co-founded while it was being headed for the first time by an outsider - Sikka.
This ultimately led to an abrupt exit of Sikka after a prolonged standoff with Infosys" promoters.
Co-founder Nandan Nilekani then assumed charge as the non-executive chairman of Infosys in August 2017. Salil Parekh, a former Capgemini executive, succeeded Sikka as the managing director and CEO of Infosys in January this year.