Former Infosys Top Executive Demands Rs. 12 Crore Severance Pay: Report
According to sources, Mr Bansal has invoked his rights to an arbitral tribunal and a meeting is scheduled next month.
Infosys had earlier agreed to pay Rajiv Bansal Rs. 17.38 crore as severance amount or 24 months of salary
Bengaluru: Rajiv Bansal, former CFO of Infosys, has dragged his former employer to arbitration to claim the remaining Rs. 12 crore of his severance pay. Infosys had agreed to pay Mr Bansal a severance amount of Rs. 17.38 crore or 24 months of salary, but the company suspended payments after he got Rs. 5 crore as co-founder N R Narayana Murthy and others objected to the severance package as excessive. According to sources, Mr Bansal has invoked his rights to an arbitral tribunal and a meeting is scheduled next month.
This has opened another battle front for Infosys, which is already fighting visa clampdown by US President Donald Trump and global headwinds.
When contacted, Mr Bansal declined to comment.
"The company has already clarified on the severance package for the former CFO Rajiv Bansal through a detailed statement. We do not have anything additional to add at this point," Infosys said in an e-mailed response.
Mr Bansal's severance payout has been one of the issues that Infosys founders had raised to allege governance lapses at the Bengaluru-based firm.
When Mr Bansal left Infosys in 2015, Infosys had agreed to pay him Rs. 17.38 crore in severance pay, equalling 24 months of pay.
In February, Infosys chairman R Seshasayee had clarified that of the agreed amount, only Rs.5 crore have been paid so far and that the remaining 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.
Mr Murthy had raised concerns about the hefty amount and questioned if the same was "hush money".
The first hearing of the court battle between Infosys and its former CFO Rajiv Bansal is scheduled in December. Bansal had involved his rights to an arbitral tribunal from his severance pay. However, Bansal is demanding Rs 12 crore of pending severance pay.
Both the parties will present documented and oral evidence in closed-door hearings. Infosys and Rajiv Bansal, both have submitted various submissions so far. When Bansal was leaving the company in 2015, Infosys had assured to pay him Rs 17.38 crore as severance, which is equivalent to his salary of 24 months.
However, the company disbursed only Rs 5 crore and did not clear the remaining payment. Industry experts believe that the payments were suspending due to certain objections raised by the Infosys board. The statement by Infosys says, “Certain payments to Rajiv under the agreement have been suspended pending certain clarifications with regard to such rights and obligations.”
Infosys co-founder Narayan Murthy publicly stated that such payments should be viewed as “hush money”.The company initiated the investigation led by a third party. Even the new Nandan Nilekani-led board of Infosys stands by the findings of the investigation that found no wrongdoing. Infosys has declined any irregularities in the process even in the past.
The Indian IT firm believes that the severance payout is subjective. Since there is no institutionalized process for granting the severance, nobody can question the decision by Infosys board. Narayan Murthy has castigated the board for not having made all disclosures. Law firm Indus Law is representing Bansal while Infosys is being represented by Nishith Desai Associates (NDA).
Infosys has now standardized its severance pay policy for top executives. Senior vice presidents and executive vice presidents are entitled to only four months of fixed salary as severance.
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