Markets regulator Sebi has accepted a consent plea by software services exporter Infosys in a case related to severance pay of its former chief financial officer Rajiv Bansal, ET Now has reported.
Infosys filed the consent plea last year in December to settle charges of disclosure lapses regarding the severance agreement it signed with Bansal in 2015. Sebi has yet to take a final call on the settlement amount, according to ET Now. A high-powered advisory panel of Sebi will decide the amount.
In a filing with the Bombay Stock Exchange, the company had said it “wanted 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 entered into with the former CFO”, through the settlement process.
In securities law parlance, consent orders are similar to an out-of-court settlement. It is a negotiated settlement between Sebi and an entity by paying a penalty or by undergoing a voluntary ban from the stock markets.
In May 2016, Infosys disclosed that it had awarded its former CFO Bansal Rs 17 crore in severance. The company paid out only about Rs 5 crore before stopping payments. Infosys and Bansal then got engaged in arbitration over the stoppage of payments. There were allegations that required prior approvals were not taken to finalise the severance agreement,
Earlier in 2017, a whistleblower had written to the market regulator over alleged lapses in the severance agreement with Bansal. The letter claimed that the package was decided by the then CEO Vishal Sikka and then general counsel David Kennedy. The whistle-blower had asked why Infosys was reluctant in disclosing answers surrounding the “hush money”.
While it was a norm for companies to settle cases via the backdoor, it should not be allowed this time and Sebi should prosecute both the board and management, he said in the letter.
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Source: Economic Times