Chairman R Seshasayee said that out of the Rs 17.38 crore decided as severance pay to Rajiv Bansal, only Rs 5.2 crore was paid.
While the boardroom tussle at Infosys boils over, the IT company's Chairman, R Seshasayee said that ex-chief financial officer Rajiv Bansal wasn't paid the entire Rs 17 crore as severance pay. He was speaking to the Economic Times.
Facing the heat from the founders, Infosys has also tweaked the norms to dictate severance pay to employees leaving the company, another report, this time by Business Standard noted.
The declaration by the chairman and the changes in severance pay norms came a day before Infosys chief executive officer Vishal Sikka is expected to meet and interact with the shareholders at an event in Mumbai. He is slated to deliver the key note address at Kotak's Chasing Growth Conference at 1000 hours on Monday.
The founders have raised questions about certain decisions taken by the board of the company. This included a hefty Rs 17 crore pay out as severance pay to ex-CFO Bansal. While founder N R Narayana Murthy asked if this indicated that hush money was used to pay Bansal, there are questions whether the huge sum was paid to buy his silence over instances of impropriety in the firm.
Seshasayee, in an interview with ET, said that Bansal was only paid Rs 5.2 crore out of the Rs 17.38 crore decided in October 2015. "the circumstances were explained several times. This took into account complex circumstances and it was a bona fide business judgement...the balance payments have been suspended since April 2016 and the reasons for suspension have also been explained," he was quoted as saying in the report.
He also refuted claims about the possible use of hush money to pay Bansal. Seshasayee cited two independent investigations that were launched to look into the matter last year, both concluding that there was "no impropriety whatsoever". The investigation was initiated after Infosys received an anonymous letter alleging wrongdoing and questioning the pay-out to Bansal.
A report by LiveMint in September last year noted that after two instalments of ten paid to Bansal, the remaining pay-outs were stopped after founders raised questions about it. At the time, Seshasayee had confirmed that the payments had been stopped but said it was in accordance to the terms of the agreement with Bansal.
“This is a severance agreement. There are rights of the parties in the contract, and the contract will be administrated in line with the rights of the parties. Period. That is all,” Seshasayee had said at the time.
While the doubts over the high severance pay to Bansal have been around since it was revealed last year. The move was questioned by proxy advisory firms, analysts, shareholders, and now the founders. In a bid to quell some heat, the board decided to tweak the norms for severance pay to employees. In a report by the Business Standard, Roopa Kudva, independent director at Infosys said, “We have done benchmarking for severance pay, according to each country and reworked the senior management contract to reflect it.”
She reiterated claims by the board that there was no hush money involved in the pay-out to Bansal while saying that, in hindsight, lessons could have been learnt from the episode and "action has been taken".
Infosys shares were trading up 0.52% at Rs 973.05, up Rs 5 from previous close.
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 "Ex-Infosys CFO Rajiv Bansal")
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