Bangalore-based IT major Infosys on Wednesday filed a consent application with the market regulator Securities and Exchange Board of India (SEBI) for settling a case related to non-disclosure of a severance pact with its former CFO Rajiv Bansal (in picture).
The 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 former chief financial officer Rajiv Bansal.
"The settlement application process is based on an undertaking that the applicant will neither admit nor deny the finding of fact or conclusion of law," said Infosys in a regulatory filing to the BSE. The settlement application pertains to the severance agreement with the former chief financial officer (CFO) in October 2015, it added.
Infosys will provide an update upon the conclusion of the confidential settlement process. The former CFO stepped down in October 2015 over differences with the top management. Bansal was offered a severance package of Rs 17.38 crore, which was about two years of pay. The company paid about Rs 5 crore, but revoked further payments after promoter shareholders raised the red flag. In February, R Seshasayee -- who was the chairman of the Infosys at that point had clarified that the remaining amount was withheld pending clarifications on the terms of the severance contract.
“Infosys is probably seeking to remove any regulatory overhang ahead of its new chief joining in January. The severance agreement was a key management personne and proper disclosure were not made Infosys. It could be that Infosys was under scrutiny by Sebi for lack of disclosure,” said Shriram Subramanian, founder and MD, InGovern Research Services.
The move comes within days of Infosys naming former Capgemini top executive Salil Parekh as its new CEO. He will take over on January 2 for five years. Infosys under present chairman Nandan Nilekani moved the application as part of its attempt to settle the issues that cropped up during tenure of former CEO Vishal Sikka.