Infosys consent plea accepted by SEBI, Pays 34 lakh to settle the charges
Before the completion of tenure of Infosys CEO Vishal Sikka, in May 2016, Infosys announced that it had rewarded Bansal with more than 17 crores of rupees as severance pay, Bansal had resigned from Infosys in October 2015, Infosys had paid him around 5 crores earlier before stopping the payments.
Infosys has now settled down the case against the severance package to Rajiv Bansal, the Ex-Chief Financial Officer of Infosys by paying almost around 34.35 lakh as consent fee with SEBI. SEBI, the regulatory market had observed that the compensation provided to the former CFO was not in accordance with the remuneration policy.
The settlement order states that the Prima facie noticed that the compensation offered to Ex-CFO was done without the permission of Nomination and Remuneration Committee (NRC) neither there was permission taken by the audit committee over the agreement of severance. Infosys had violated various SEBI rules. SEBI also mentioned that the details regarding the severance agreement and the timely declaration of it was lacked by Infosys, they failed to provide us with the details of initiation of arbitration proceedings and termination of the severance payment.
An application was filed under the settlement mechanism by Infosys in December 2017.
Against the settlement charges Infosys paid a vast amount of 34.35 lakh on 4th February, after this the market regulator had inclined the “proposed adjudication process due to respect for the applicant of the defaults.”
The red flag was first raised by Infosys founder NR Narayan Murthy during February 2017 over the failure of Infosys to disclose norms. The severance package offered to Bansal was not placed before the company board. Although Infosys had tried not the pay, the remaining severance payment to Bansal but the company lost the case against him in September. Infosys was supposed to pay the remaining amount of 12 crores along with interest. Infosys stated that it would obey the decision.
The issue refers to the severance offer provided to Bansal of about 173.8 million of rupees in October 2015; Bansal was forced to resign from his post due to differences between then CEO Vishal Sikka over the acquisition of Israeli Technology Company Panaya. The Panaya firm was supposed to be acquired by Infosys by paying $200 million.
The SEBI report mentioned that if any false representation has been made and has noticed then Enforcement actions will be taken which includes restoring or initiating the proceedings.
Infosys meeting with the regulator’s internal committee held in February 2018 had intended to pay Rs. 34.35 lakh towards settlements. The settlement amount was then sanctioned by the full-time SEBI members, the regulatory informed in an order dated on February 15.
The CEO of Infosys Salil Parek, who was appointed last year, clearly stated that the company is not going to waste its time by going over its past issues like the concerns over the acquisition of Panaya.
The acquisition of Panaya and Skava had been put for sale by Infosys; unfortunately, they failed to attract buyers.
There were doubts raised over the deal with Bansal, stating that the Panaya has been acquired through illegal ways. The unknown whistleblower had informed to Infosys board and SEBI in written and requested for an investigation over the Panaya deal.