India’s second largest software exporter Infosys on Wednesday said it has approached the Securities and Exchange Board of India (Sebi) to settle a case of alleged disclosure lapses involving the severance pay deal with former chief financial officer, Rajiv Bansal.
“The settlement application pertains to matters relating to severance agreement entered into with the former CFO in October 2015,” said Infosys in a filing to the stock exchange.
“Through the settlement process, the company wants to resolve allegations relating to the company not seeking prior and separate approval of the Nomination and Remuneration Committee and the Audit Committee in relation to the severance agreement with the former CFO; and in relation to disclosures pertaining to the said severance agreement, cessation of payments and initiation of arbitration under the severance agreement.”
Earlier this year, Infosys co-founder NR Narayana Murthy had raised concerns about several governance issues at the firm, including a Rs 17.38-crore severance package for Bansal. Subsequently, Sebi began probing a letter by a whistleblower highlighting alleged corporate governance lapses at the information technology firm during the tenure of its former chief executive officer, Vishal Sikka.
Sikka resigned from the post of CEO in August following differences with some founders of the company, including Murthy.
The anonymous letter of the whistleblower alleged that Panaya was bought for over $200 million despite the firm being valued at $162 million during an E-series funding a month prior to the purchase. The letter alleged that the Panaya deal benefitted Hasso Plattner, the co-founder of SAP — where Sikka was the CTO before joining Infosys in 2014. Plattner had 8.33 per cent stake in Panaya. Venture firm Israel Growth Partners were the series E investors.
The letter alleged that the Infosys board failed to see governance issues involved while clearing the Panaya deal and that Bansal’s exit was linked to differences over the Panaya acquisition.
On Wednesday, Infosys said its settlement application process is based on the undertaking that it will “neither admit nor deny the finding of fact or conclusion of law”.
Infosys said it will provide an update “upon the conclusion of the confidential settlement process”.