Infosys probe panel gives former CFO Rajiv Bansal a clean chit

Infosys has said the probe panels constituted to investigate certain allegations against former CFO Rajiv Bansal have found no wrongdoings.

At the same time, the IT major pointed out that certain payments to Bansal as part of the separation agreement have been suspended pending certain clarifications, but it is not on account of any extraneous considerations.

In a statement, Infosys said it had signed a separation agreement with Bansal on October 11, 2015. The agreement provided for extended non-compete obligations, besides other rights and obligations usual for such agreements. The agreement also explicitly enabled Bansal to report to the regulatory authorities in future any matter of impropriety that he became aware of that happened during his tenure. The severance pay amounted to 24 months’ pay, amounting to ₹17.38 crore.

It clarified that the agreement is being administered in accordance with the contractual rights and obligations. However, certain payments to Bansal under the agreement have been suspended pending certain clarifications with regard to such rights and obligations.

The statement follows several reports, which suggested that the compensation amount given to Bansal, who quit the company in October last year, had been stopped because of pressure from the founders who found the pay-out extremely high.

Infosys, led by MD and CEO Vishal Sikka, said all the necessary statutory filings and disclosures have been completed. “Further, Chairman R Seshasayee made a statement at the company’s annual general meeting on June 18, 2016, explaining the rationale for the severance quantum and assuring shareholders that there was no impropriety of any nature.”

Infosys went ahead and its audit committee of the board set up two separate probe panels over a period of one year following certain insinuations/rumours, and an anonymous letter received regarding Bansal’s separation.

The first such probe was conducted in October 2015 and the second in August 2016. The investigations were conducted by law firm Cyril Amarchand Mangaldas. Both investigations were shadowed by KPMG, the company’s auditors, and “revealed no wrong doings or efforts to cover up any wrong doings”.

The 2015 investigation related to rumours that Bansal had made certain insinuations against the management. These were promptly investigated by the independent law firm, which concluded there was no substance to any of these rumoured insinuations. It is also noteworthy that Bansal denied on record that he had made any such insinuations.

The 2016 investigation was ordered by the Audit Committee, following the receipt of an anonymous letter that alleged the severance payment to Bansal was intended to silence him. The investigation comprehensively looked into the circumstances leading to the severance agreement and in particular, whether the payment was intended to silence Bansal from disclosing any impropriety.

Cyril Amarchand Mangaldas concluded that the severance payment made to Bansal was not with the intention of silencing him from disclosing any impropriety. The agreement with Bansal allowed him to report to the regulatory authorities in future any matter of impropriety that he became aware of that happened during his tenure.

Further, necessary approvals had been obtained and appropriate disclosures were made in the matter. The investigation was based on extensive examination of records, emails and interviews with relevant people.

Latham & Watkins, legal advisors to the Board supervised and coordinated the investigation. Latham & Watkins have confirmed the independence of Cyril Amarchand Mangaldas, the comprehensiveness of the investigation and the conclusions thereof.

KPMG, the statutory auditors of the Company, had conducted shadow proceedings on both investigations and have expressed satisfaction with the investigations and conclusions of the reports.

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