Infosys Ltd. today filed a consent application with market regulator SEBI over its settlement of former Chief Financial Officer Rajiv Bansal’s severance pay.
In an notification to the stock exchanges, the Nandan Nilekani-led company said it wanted to resolve the allegations that it failed to seek prior and separate approval of the Nomination and Remuneration Committee and the Audit Committee in relation to the severance agreement signed with Bansal.
The company also failed to disclose the severance agreement, cessation of payments and initiation of arbitration under the severance agreement, the statement added.
The former CFO stepped down in October 2015 over differences with the top management. At the time, Bansal was offered a severance package of Rs 17.38 crore, nearly two years of pay. Infosys had said the payout was in accordance with the contractual rights and obligations but later suspended it after co-founders, including NR Narayana Murthy and others termed it excessive. Bansal received Rs 5 crore before his severance package was suspended.
Infosys had said in a previous statement that certain payments to Bansal had been suspended pending certain clarifications. “...the suspension is not on account of any extraneous consideration,” it had added.
Murthy and other co-founders were engaged in a long-drawn battle with the company’s management as they questioned executive compensation and corporate governance at Infosys and raised doubts over excessive payments. Murthy opined that the severance payout could be seen as “hush money”.
Denying that charge, former Infosys chairman R Seshasayee had told BloombergQuint in an interview that there was an “element of subjectivity” in the decision on the former CFO’s severance pay.
The boardroom drama eventually led to the resignation of Seshsayee and former CEO Vishal Sikka.