Infosys ordered to pay ex-CFO Rajiv Bansal Rs 12.17 cr with interest

Infosys has been told to pay its former chief financial officer Rajiv Bansal ₹12.17 crore with interest, after an arbitration tribunal ruled in favour of the former executive, marking a setback for the software services exporter as it looks to erase the scars of past management turmoil.

Bansal initiated arbitration proceedings in April 2017 after the Infosys board halted further payouts on his ₹17.38-crore severance package, which was awarded at the time of his exit in December 2015.

The issue snowballed into a raging controversy when Infosys founder NR Narayana Murthy raised a red flag claiming the payout had been made without adequate disclosures. Vishal Sikka was the CEO of Infosys back then.

In response to Bansal’s claim, the Bengaluru-headquartered IT company filed a counter claim asking for the refund of the initial severance payment of ₹5.2 crore and damages of ₹100 crore.

Read: The saga of ex-Infosys CFO Rajiv Bansal

Infosys also claimed that it had suffered financial loss as Bansal had deleted data from his official laptop. Former Supreme Court judge RV Raveendran — who was the arbitrator — rejected the company’s claims, including a refund.

“While the award acknowledges that Infosys had bonafide disputes, its counter claim for refund of previously paid severance amount of ₹5.2 crore and damages, has been rejected...,” the company said in a statement to the Bombay Stock Exchange. “Infosys will take legal advice for necessary actions to be undertaken in respect of the award.”

Infosys did not elaborate, claiming that the arbitral award was confidential. Bansal did not respond to calls or messages seeking comment for this story.


Bansal’s severance has been a flashpoint in the governance battle waged by Murthy against the company’s board last year. Murthy said the outsized severance promised to Bansal could have the appearance of ‘hush money.’

He had also questioned the acquisition of Israeli software firm Panaya, a buyout that has since gone sour as Infosys is now seeking a buyer for the unit and has written off more than half the cost incurred in its acquisition. Bansal’s successor MD Ranganath also resigned from the company in August. Murthy could not be reached for comment on the arbitration verdict.

Former Infosys executives are of the view that successive boards at the company have failed and questions about governance are yet to be answered. “First of all both the boards have failed. Now the arbitration court has given its decision, I do not think the company has better chance of going for appeal, unless they have any new evidence,” said a former senior Infosys executive.

“If they have violated some conditions of the severance contract it will not stand in any court. Arbitrator has looked into all the details. Both the parties already put in their facts before the arbitrator,” the person said.

Legal experts say Infosys can appeal the award in the courts but a victory is not guaranteed. Salman Waris, Managing Partner, TechLegis Advocates and Solicitors, however, sees a possibility of challenging the arbitrator’s decision on ground that the company claims the agreement was void.

“There are provisions under the Arbitration (and Conciliation) Act, 2015 that they (Infosys) can challenge it before the High Court. The only possible ground that I can see if they call the agreement with Bansal is void. It is not going to be an easy ground though,” said Waris.

He added that this decision could set an example for future employment arbitration cases in the industry. Law firm Indus Law represented Bansal, while Infosys was represented by Nishith Desai Associates.

Corporate governance experts say it might be better for the company to put an end to the episode as any legal battle in the courts will bring Infosys back to public scrutiny.

“Infosys would need to draw a line somewhere as to whether they want to further pursue the matter in courts and what objectives would be served from pursuing the issue,” Shriram Subramanian, founder and managing director at InGovern Research Services, said. “In the arbitration, the arguments were in closed door. If they appeal in the High court, then the case will be in the public domain.”

Infosys stock closed down about 1% at ₹720 on the National Stock Exchange on Tuesday.