Infosys rules out irregularities in Panaya deal, severance pay to Bansal

Infosys Technologies, India’s second-biggest information technology services company, on Tuesday, reaffirmed the previous findings of external investigations into the alleged wrongdoings in the firm’s Panaya deal and a severance payment to former chief financial officer Rajiv Bansal.

“As previously indicated, the chairman (Nandan Nilekani) has conducted a review of all the external investigations into certain anonymous complaints the company had previously received. The review covered a range of matters…, including the acquisition of Panaya which was completed by the Company in February 2015 and the severance payments to the former CFO,” Infosys said in its statement to stock exchanges.

The statement also quoted Nilekani as saying that he and the board were fully convinced that the conclusions of the independent investigations were correct. “I believe that all stakeholders acted out of a strong passion for Infosys, wanting what they believed to be the best for the Company and to see it succeed. In light of my review of these matters, I am fully persuaded, as is the entire Board, that the conclusions of the independent investigations are correct. This Board and I are committed to the highest standards of professionalism and will deal promptly and decisively with any governance issues should they ever come up in the future.”

In early 2017, an anonymous whistleblower had alleged lapses in governance at Infosys. The most serious allegations were impropriety in acquisition of the Israeli company Panaya in 2015 and payment of ‘hush money’, in the form of high severance pay, to then CFO Rajiv Bansal, who was not in favour of the deal. Co-founder N R Narayana Murthy had also, publicly, expressed his displeasure with some decisions of the board, such as the severance pay to Bansal, high salaries paid to former CEO Vishal Sikka and COO Pravin Rao, and high spending by Sikka.

The company’s board had appointed globally reputed law firm Gibson Dunn to investigate the allegation. The firm had not find evidence of ‘wrongdoing’. The board had published the summary of the investigation report and also hired law firm Cyril Amarchand Mangaldas to review corporate governance practices. On severance pay to Bansal, in February 2017 the board had publicly admitted that there was an “error of judgement”, it had “learned from the incident” and “there would be no more Rajiv Bansals”.

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