Infosys has lost the arbitration over severance package of its former chief financial officer Rajiv Bansal and has been asked to pay outstanding amount of Rs 12.17 crore, with interest, the firm said on Tuesday.
Bansal had dragged the country’s second largest IT services firm into arbitration after the company had halted his severance pay of over Rs 17 crore.
“The arbitral tribunal has communicated its decision in the arbitration proceedings in relation to the severance agreement between the company and its former CFO Rajiv Bansal,” Infosys said in a BSE filing.
As per the award, Infosys is required to pay Bansal the outstanding severance amount of Rs 12.17 crore, with interest, it added.
“While the award acknowledges that Infosys had bona fide disputes, its counter claim for refund of previously paid severance amount of Rs 5.2 crore and damages has been rejected,” the filing said, adding that the arbitral award is confidential.
The Bengaluru-based company said it will take legal advice for further action on the issue.
When Bansal left Infosys in 2015, the IT firm had agreed to pay him a severance amount of Rs 17.38 crore or 24 months of salary.
The severance payment made to Bansal—who had been paid Rs 5 crore by then --- was among the key issues flagged during the battle between the founders and the previous Infosys management.
Co-founder NR Narayana Murthy and others had objected to the payment saying it was excessive. Murthy went to the extent of calling the payment made to Bansal as ‘hush money’.
In February last year, R Seshasayee—who was the chairman of the Infosys board at that point—had clarified that the remaining amount was withheld, pending clarifications on the terms of the severance contract.
He had also admitted that the “judgement” could have differed if circumstances were different or if certain processes had been in place.
While asserting that there were no irregularities related to the severance package, Infosys said it has since framed a process for granting severance.
In December, Infosys—through a discloure to exchanges—had also stated that it had approached market regulator Sebi with an application to settle the issues arising out of alleged disclosure lapses related to the severance package paid to Bansal. However, it had maintained that the settlement application made to Sebi was neither admission of guilt nor a denial.