Infosys asked to pay ₹13.58 crore to ex-CFO

NEWDELHI: An arbitral tribunal’s verdict ordering Infosys Ltd to pay its former chief financial officer (CFO) Rajiv Bansal ₹13.58 crore, including ₹12.18 crore in severance and ₹1.4 crore in interest, revives questions about the decision made by the firm’s board to arbitrarily halt the payment.

Infosys’s board, led by former chairman R Seshasayee, had decided two years ago to stop the payout reportedly after some of its founders expressed their unhappiness.

Arbitrator retired Supreme Court judge RV Raveendran looked only into the employment contract of Bansal and if the company’s decision to halt outstanding payment was fair, an executive familiar with the development said on condition of anonymity. justice Raveendran did not go into the merits of Infosys’s decision to pay Bansal a severance. Founder NR Narayana Murthy had raised the issue of severance payment in the past, saying that the payout had the appearance of hush money to buy Bansal’s silence.

Calls and text messages to Bansal and Seshasayee seeking comment went unanswered. An email sent to Murthy seeking comment didn’t elicit a response.

“The arbitrator only looked into if Bansal’s employment contract with Infosys was watertight and if Infosys’s decision to halt the payment was valid. The ruling clearly suggests that the ground of stoppage was not substantive enough,” said Shriram Subramanian, founder of proxy firm InGovern Research.

“While the award acknowledges that Infosys had bona fide disputes, its counter claim for refund of previously paid severance amount of ₹5.2 crore and damages, has been rejected. The arbitral award is confidential,” Infosys said in a statement to the exchange. “Infosys will take legal advice for necessary actions to be taken in respect of the award.”

“I don’t think Infosys will fight the case any more because it is closed-door proceedings in arbitration and the company won’t like to again go through this in public, when it takes this to a court,” said Subramanian.