The legal dispute between Infosys and its former CFO Rajiv Bansal has taken an interesting turn with the company filing a counterclaim to the tune of over Rs 100 crore with the arbitration judge.
The legal dispute between Infosys and its former CFO Rajiv Bansal has taken an interesting turn with the company filing a counterclaim to the tune of over Rs 100 crore with the arbitration judge. The dispute between the two parties centres around the non-payment of compensation amount of Rs 12.38 crore to Bansal, which is being contested by Infosys. According to sources familiar with the developments, Infosys has made this counterclaim against Bansal with arbitration judge through both oral and written submissions for supposedly breaching trust and confidentiality. In response to a query from FE, Infosys said: “We have no comments to offer.”
Bansal, who resigned as Infosys CFO in October 2015, was given a severance package of Rs 17.38 crore and this was disclosed only in the company’s annual report. This unusually large sum of money became a controversial issue and the then Infosys board decided to pay only Rs 5 crore and kept the rest of the money in suspension. As the dispute did not reach any settlement, Bansal invoked the arbitration clause.
Sources said the latest move by Infosys is seen as a pressure tactic against the former CFO. “It is very unlikely that Infosys would pay the entire compensation amount sought by Bansal and filing the counterclaim shows that they are ready for the long haul,” the source said. In a regulatory filing to the stock exchanges in December last year, Infosys had stated it has sought a settlement with Sebi over the alleged disclosure lapses on the severance package paid to Bansal. “The settlement application process is based on an undertaking that the applicant will neither admit, nor deny the finding of fact or conclusion of law.” Infosys had then stated that it wants to resolve all the allegations surrounding the severance package.
The severance package to Bansal also came under severe attack from Infosys founder NR Narayana Murthy who termed it “hush” money. This was also the time when there was a raging controversy over the acquisition made by Infosys of Panaya by the then CEO, Vishal Sikka. Murthy had made serious allegations that the Panaya acquisition was much above market value and linked it to the compensation paid to Bansal.
The then board of Infosys defended the compensation on the ground that it was given to maintain confidentiality of certain information of the company. However, the critics of the compensation package to Bansal have said there was no severance clause in the former CFO’s employment agreement. Infosys, under the previous board headed by R Seshasayee, came under severe attack from Murthy for alleged serious lapses in corporate governance. The Infosys founder had publicly expressed his disapproval over certain decisions taken by the company he had co-founded.