Following a long drawn controversy regarding the severance pay of Rajiv Bansal, the former Chief Financial Officer of Infosys, a new report suggests that he is fighting the company over dues.
According to a Times of India report, Bansal is fighting Infosys over Rs 12 crore that, as claimed, has been held back. According to Infosys, Bansal’s severance package at the company when he was leaving in 2015, was Rs 17.38 crore which equalled a 24 month’s pay. His salary package of $770,858 (end of March 2015) was next only to CEO Vishal Sikka and COO UB Pravin Rao. In this fight against Infosys, Bansal is being represented by Indus law, even though his usual advocates are AZB Partners.
Infosys’s former CFO Rajiv Bansal is fighting for the portion of his controversial severance pay that the company has held back.
Bansal has invoked his rights to an arbitral tribunal and former Supreme Court judge RV Raveendran has been appointed sole arbitrator in the case. The first arbitration meeting is scheduled in May, said sources familiar with the development. Law firm Indus Law is representing Bansal, while Nishith Desai Associates is Infosys’s counsel in the matter.
When Bansal was leaving the firm in 2015, Infosys had agreed to pay him Rs 17.38 crore in severance the equivalent of 24-month pay. But it disbursed only Rs 5 crore and halted the remaining payment.
Infosys then said the agreement with Bansal had provided for non-compete obligations, as also other rights and obligations. “Certain payments to Rajiv under the agreement have been suspended pending certain clarifications with regard to such rights and obligations,” it had said in a statement.
Many observers believe the payment was suspended following objections, especially from some of Infosys’s founders, that the amount was excessive. Co-founder NR Narayana Murthy had said such payments may be viewed by some as “hush money”+ and castigated the board for not having made all disclosures with respect to it.
Earlier this year, Infosys admitted an element of subjectivity had influenced the quantum of severance pay granted to Bansal and that it had since then put in place a policy to ensure that there would not be a repeat of it.
Asked about the arbitration move, Infosys said it has already clarified on the severance package for Bansal through a detailed statement. “We do not have anything additional to add at this point,” it said. When TOI contracted justice Raveendran on the matter, he said arbitration is a private matter. “I’m in the position of a judge and adjudicator and cannot comment on a pending matter,” he said.
Bansal is said to have chosen arbitration over court proceedings because he believes it will provide for speedier determination of the issue and the proceedings will be private and confidential. The arbitration Act provides for time bound arbitrations.
Karthik Mahalingam, partner and head of office, Bengaluru, and national practice head for venture capital at law firm Shardul Amarchand Mangaldas, said the provision for severance has been of more recent origin and its terms seem to vary based on specific circumstances. “We have typically seen HR disputes arise with respect to senior hires, in case of issuance of ESOPs and defaults of noncompete clauses,” he said.