Infosys loses arbitration, asked to pay Rs. 12cr to Bansal
India's second largest software company, Infosys Ltd., has lost the arbitration over its disputed severance package to former Chief Financial Officer (CFO) Rajiv Bansal.
The arbitral tribunal has now directed the company to pay the outstanding severance of Rs. 12.17cr with interest to Bansal.
The entire episode unfolded after founder Narayana Murthy publicly questioned the heavy severance package awarded to Bansal.
Bansal was promised Rs. 17cr, but was't paid fully
Rajiv Bansal had resigned as the Infosys CFO in 2015, following which then CEO Vishal Sikka had awarded Bansal a severance package worth Rs. 17.38cr, or 24 months of salary.
However, after Murthy and others objected to the package, calling it excessive, Infosys stopped the payments - out of the Rs. 17.38cr promised, Infosys paid only Rs. 5cr.
Infosys' statement on the arbitration proceedings
"The [Rs. 12.17cr] award acknowledges that Infosys had bona fide disputes and that its counter claim for refund of previously paid severance amount of Rs 5.2 crores and damages, has been rejected," said Infosys in a filing to stock exchanges on Tuesday.
Love Business news?
Stay updated with the latest happenings.
Yes, notify Me
Bansal had initiated arbitration proceedings in April 2017
Notably, Bansal's severance package was among the governance lapse issues raised by Infosys founders.
Subsequently, in April 2017, Bansal dragged the software giant into arbitration, demanding that the outstanding amount due to him be paid in full.
Now, Infosys has said that it will take legal advice on how to proceed with the issue.
As it stands, Bansal is set to get his dues.
CEO Vishal Sikka
Chief Financial Officer