Home >Companies >News >Infosys pays 6 lakh as compounding fees to settle former CFO severance issue

Bengaluru: Infosys Ltd on Monday evening said it has paid 6 lakh as compounding fees in the matter related to severance agreement with former chief financial officer (CFO) Rajiv Bansal, which may finally settle the long-drawn severance pay row that had surfaced in 2016.

The Bansal severance pay drama surfaced in May, 2016 when Mint reported about the company agreeing severance pay, salary and other benefits to Bansal. Although Bansal had resigned in October, 2015, Infosys had first disclosed the severance payments as a footnote in its annual report. At the company’s annual general meeting (AGM) on 18 June, Infosys for the first time disclosed — seven months after Bansal quit — that he had been paid two of the 10 instalments as part of 17.38 crore in severance.

In November 2019, Infosys (along with certain current and former key managerial personnel) had submitted applications with the Registrar of Companies (ROC) for compounding of certain alleged offences that pertain to matters related to the severance agreement executed with Bansal in October, 2015.

"...The Regional Director (South East Region) vide its orders dated February 25, 2020, (received on March 2, 2020) has agreed to compound the alleged offences applied for, subject to payment of compounding fees of 6 lakh..." Infosys said in its filing on Monday.

Infosys said that these compounding fees have been paid. The fee of 6 lakh consists of 1.5 lakh in respect of each application for each alleged offence by the company and 25,000 by each of the current and former key managerial personnel for each alleged offence.

Though Infosys had earlier agreed to pay Bansal a severance amount of 17.38 crore or 24 months of salary earlier, the company had suspended payments after some of its founders had expressed their displeasure on the board’s decision to make severance payments, which forced the earlier board to arbitrarily halt the payments.

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