September 18, 2018
India’s second largest IT services firm Infosys today said it has lost an arbitration case over severance package to its former CFO Rajiv Bansal. The software major has been asked to pay outstanding amount of Rs 12.17 crore, with interest.
“The arbitral tribunal has communicated its decision in the arbitration proceedings in relation to the severance agreement between the company and its former CFO, Mr 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.
Infosys had agreed to pay Bansal a severance package of Rs 17.38 crore or 24 months of salary, but the company suspended payments after he got Rs 5 crore as co-founder NR Narayana Murthy and former board member Mohandas Pai objected to the move and termed it ‘excessive’. While Murthy called it a ‘hush money’, Mohandas Pai asked the Infosys board to explain severance pay in detail.
Following this, Bansal had dragged his former employer to arbitration to claim the remaining Rs 12 crore of his severance pay.
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 Bansal left Infosys in 2015, Infosys had agreed to pay him Rs 17.38 crore in severance pay, equalling 24 months of pay
Infosys said it will take legal advice for further action on the issue.