A day after Infosys management including chairman R Seshasayee and CEO Vishal Sikka claimed there was no governance issue in the company, its former chief financial officer T V Mohandas Pai accused the firm of not disclosing necessary details on former CFO Rajiv Bansal’s exit with a severance package of Rs 17.3 crore.
“In October 2015, they had a press release saying the CFO is going, and both the CFO and CEO said nice things about each other. They did not disclose (the severance package)… They didn’t disclose after the December quarter (results),” Pai told PTI. Corporate observers said this is a clear indication that former directors and founders of the firm are not satisfied with the Board’s clarification on Monday.
Pai claimed that the firm disclosed the severance agreement it had reached with the then CFO Bansal in the annual report only after the media got a whiff of the matter. “Nobody pays you 24 months of severance in India,” he said and also questioned the current management’s justification on a lack of chemistry between Sikka and Bansal.
Pai said the CFO is responsible for financial integrity and added that the audit committee of the Board should have stepped in with posers on the high payout to “get rid” of a person who is “inconvenient” to the management.
He also asked institutional investors to come out and support the founders. “I want all institutional shareholders to come together and rise to demand better performance from all the companies. Institutional investors not talking about it is a disgrace to investors,” he said.
Former Infosys chairman and co-founder NR Narayana Murthy is yet to withdraw his statement on concerns over governance and disclosure issues. “I have not withdrawn my concern. They have to be addressed properly by the board…,” Murthy had said.
Seshasayee indicated that the severance package of Bansal is under review. Infosys had earlier agreed to a Rs 17.3-crore payout but after reviewing company practices it was decided that only Rs 5 crore be given to Bansal. Concerns raised by founders over former Bansal’s severance pay are valid, but the suspicion raised about the ‘hush money’ is disturbing. “Bansal’s severance was not hush money,” he said and ruled out another investigation.
While Sikka said Bansal had “chemistry” issues, Seshasayee said it was an matter of “alignment”. Sources said questions about corporate governance issues at the meeting between Infosys management and institutional investors on Monday were less than 10 per cent as most of the investors were keen on getting more details on the company’s outlook on the performance front. Late last week, Pai had asked institutional investors to ask tough questions on the cash pile and governance issues.