BENGALURU: In a setback to India’s second largest IT exporter Infosys, an arbitration tribunal has asked the company to pay Rs. 12.17 crore the outstanding severance pay to the former Chief Financial Officer Rajiv Bansal. This amount would be in addition to the Rs 5.2 crore paid to Bansal.
According to a regulatory filing to the Bombay Stock Exchange, Infosys said, "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. Per the award, Infosys is required to pay Bansal the outstanding severance amount of Rs.12.17 crores with interest."
Commenting on the verdict by the tribunal the company said, "Infosys will take legal advice for necessary actions to be undertaken in respect of the award."
Bansal had quit Infosys in 2015 and the company had signed an agreement to pay him Rs. 17. 38 crore which was equivalent to his 24-month pay. However, Infosys founder N R Narayanamurthy among others had questioned the company's move to pay hefty severance money to the former CFO.
The payment of such a huge severance package to Bansal was one of the reasons for the tussle between the founders and former board under the leadership of Seshasayee. The founders had termed this as a failure of corporate governance. At the same time, a whistleblower in his letter to the SEBI had termed the severance pay as "hush money" paid to silence the former CFO.
As a result, the company had suspended the payments to Bansal after paying Rs. 5.2 crore. Later in 2017, Bansal had approached the arbitration tribunal to claim the remaining amount as offered by the company during his exit.