Infosys cites data deletion to deny Rajiv Bansal’s payment

 

Infosys, which is engaged in arbitration with its former chief financial officer Rajiv Bansal, has claimed that it suffered financial loss due to deletion of data from his official laptop, according to two people aware of the proceedings. They said the claim will weigh on the final verdict expected to be delivered in August.

Lawyers representing the two parties sparred over the charge made by the software services exporter, which is contesting Bansal’s claim for a full payment of the severance package of Rs 17.38 crore awarded to him at the time of his exit from the company in 2015, the sources said. InfosysNSE 0.89 % at that time was led by former chief executive officer Vishal Sikka.

“Bansal’s (lawyers) defended his action saying it is normal for senior executives who leave an organisation to delete data in their official systems and the company should have stored such sensitive data on its servers,” said one of the people cited above.

During the hearings, Bansal’s legal team also questioned Infosys for backtracking on its commitment to pay the severance pay, saying the “pact was not from an individual (Sikka) but from an organisation that has standing in the corporate world”.

The hearings between the two parties were completed nearly a week ago, with written comments required to be submitted to the sole arbitrator — former Supreme Court Justice RV Raveendran.

Award may Take up to 3 Months
“A final award could take up to three months,” the sources told ET. The award by an arbitrator is likely to be binding on both parties.

Infosys declined to comment for this story. Indus Law, the legal firm that invoked rights of Bansal for arbitration, and Nishith Desai Associates, which represents Infosys, did not reply to emails seeking comment.

Bansal did not reply to telephone calls or email seeking comment.

Governance experts feel Infosys will seek to hold back further payment. “Infosys will seek to hold back severance payment to Bansal,” said Shriram Subramanian, managing director of InGovern Services, a proxy advisory firm.

Bansal sought arbitration proceedings against Infosys last year, as the $10.9 billion IT services company had withheld a large portion of the severance package promised to him at the time of his exit. Infosys, which had made an initial payout of Rs 5 crore to Bansal, later withheld further payment “pending clarifications with regard to such rights and obligations”.

MURTHY OBJECTIONS
Soon after, murmurs over the hefty severance package grew to a loud rumble with Infosys founder NR Narayana Murthy citing it as an instance of alleged corporate misgovernance. Murthy raised a red flag over failure of disclosure norms by the company, saying the details of the severance package had not immediately been placed before the board of the company.

In February 2017, an anonymous whistleblower wrote to market regulators in India and the US alleging wrongdoing in acquisition of Israeli software maker Panaya by Infosys in 2015. The letter also questioned award of the large severance package to Bansal.

US law firm Gibson, Dunn and Crutcher, which was hired by Infosys to conduct an independent probe into the allegations in the whistleblower letter, found no evidence of wrongdoing and gave a clean chit to the company and its former CEO Sikka.

Sikka resigned from Infosys in August 2017. Last month, new CEO Salil Parekh announced that Infosys will sell Panaya, writing off $90 million of the company’s value, as well as Skava — both firms that Sikka had acquired.

“Now that Infosys has decided to sell off Panaya, Bansal’s access to documents pertaining to the deal, whatever he may have, would become irrelevant,” said an investor, who did not want to be named.

Link: Economic Times- May 03, 2018