Bansalgate shows no sign of cooling off
With a new drama playing out over former Infosys CFO Rajiv Bansal (in pic) taking the arbitration route to get the company to settle the balance amount as agreed in the severance agreement, when he left the company in late 2015, old fissures have reopened between the founders and the executive management.
A section of die hard Infoscians told FC off the record that this once again proves conclusively that the Infosys presser was a charade and a big lie was playing out where an effete chairman R Sesahsayee, who has no control over his CEO Vishal Sikka, tried to hoodwink one and all. Bansal opting for arbitration, according to them, once again highlights the fact that there was no disclosure on the part of the board regarding his severance pay, followed by a complete failure of corporate governance and transparency standards and proving unequivocally that the chairman and the CEO were not on the same page.
While the company had agreed to pay him Rs 17.38 crore, which is equivalent to 24 months of pay, it actually paid only around Rs 5 crore and suspended the balance amount.
The old guard now believes that this latest action by Bansal once again confirms that hush money paid to Bansal over the Israeli software firm Panaya deal, something that he refused to sign off on. Bansal has now invoked the arbitration clause, an option granted under the severance package when he left, to recover the balance due.
A former Supreme Court judge, R V Raveendran has been appointed as the sole arbitrator in the case. The first hearing is scheduled for next month, it is learnt. While law firm Indus Law is representing Bansal in the arbitration proceedings, Nishith Desai Associates will represent Infosys.
The founding team remains critical of the way the entire Bansalgate has been handled by the new management for they reckon they have failed on every parameter. Moreover by lying unabashedly to media, they have exposed themselves. However, they are happy with the appointment of a co-chairman and are waiting and watching to see his exact role in the company's operations and whether this will bring checks and balances.
The huge severance package offered by the company to Bansal was one of the key issues, when the founders’ led by N R Narayanamurthy raised ‘corporate governance’ issues on the present Infosys management. Murthy even went to the extent of terming the huge severance package as “hush money”.
“The company has already clarified on the severance package for the former CFO Bansal through a detailed statement. We do not have anything additional to add at this point,” an Infosys spokesperson told FC, when contacted on Thursday.
Certain payments to Rajiv, under the agreement, have been suspended pending certain clarifications with regard to such rights and obligations, the company had said earlier in its statement.
Seshasayee and Sikka, who jointly addressed a press conference with rest of the company’s management in Mumbai in February this year to clear all issues raised by the founders and others, elaborately explained the circumstances under which the severance package was agreed. It was based on a business judgement and application of mind. But, there was also a subjectivity element in that and the company had since then introduced a process change, with the help of a consultant, and have removed any element of subjectivity in such cases, since October, 2016, Seshayee explained.
He had also then brushed aside issues on corporate governance and also the huge severance package may have included any ‘hush money’. There was an anonymous whistleblower complaint. The company carried out a detailed investigation, with the help of a global law firm and the details were public, he had said.