Issues pertained to lapses in procedures, and not a financial crime said an HR expertHR expert says despite whistleblower’s objection to Infy consent plea, Sebi may give its nod as it involved procedural lapses, estimates fine to be around Rs 30 cr
Sparring parties indulged in a war of words even as the response of the market regulator Securities and Exchange Board of India (Sebi) to the second largest information technology (IT) firm Infosys’s consent application relating to Panaya deal and former CFO’s severance package is awaited.
At the same time, experts believe that the closure of the whole issue was near despite the anonymous whistle-blower’s objection to it as the case involved lapses in procedure and was not a financial fraud.
On Monday, the former chief of finance at Infosys, T V Mohandas Pai, hit out at Kiran Mazumdar-Shaw, chairperson and managing director (CMD) of Biocon and also an independent director on the Board of over $10-billion IT firm, by asking her to make the “reinvestigation” report on Panaya deal and former CFO’s severance compensation public if there was no “wrongdoing”.
“If no wrong doing found, pl(ease) release the report of the reinvestigation! Why hide this? Why hide Panaya report and say no wrong doing! why hide all reports? where is the transparency! Then you folks abuse NRN (Murthy, promoter of Infosys) when he seeks transparency and write to SE,” he tweeted.
Pai was responding to Muzumdar-Shaw’s tweet on Saturday; “The matters (Panaya and former CFO Rajiv Bansal’s exorbitant severance package) were reinvestigated (a)n(d) no wrongdoings were found by new chairman. Let’s bring this to a closure (a)n(d) move on. It helps no one,” she tweeted.
Interestingly, her tweet was also a reply to Pai’s earlier tweet that said lapses at Infosys were “substantial matter”.
Equally vociferous is ex-CFO of Infosys V Balakrishnan, who has asked for the resignation of two Board members Roopa Kudva and Ravi Venkatesan. He said the two were in “responsible position” at Infosys when the violation of corporate governance occurred at the company.
“The whistleblower has said whatever he wants to say as per his viewpoint. These are legal issues decided based on merits and not individual's emotions. What Securities and Exchange Board of India as a regulator thinks and decides is all that matters,” he told a leading news agency on Monday.
The issue of the controversial exit of Bansal from the Bengaluru-based IT firm in 2015 erupted all over again last week after a consent plea was filed by Infosys with Sebi.
Founders and some senior management of Infy have raised concerns over breaches in corporate governance in the acquisition of Israeli automation company Panaya and pay-out of high severance money to Bansal. They have called the abnormal severance compensation paid to the former CFO as “hush money”.
Many see Infy’s consent agreement as its attempt to bring the whole episode to an end by settling the matter by paying a fine and moving on.
Kris Lakshmikanth, founder and chairman of The Head Hunter Pvt Ltd, said since the issues pertained to lapses in procedures, and not a financial crime, it is very likely that the market regulator may give its consent for settlement.
“What they (Infy) are a saying is that they (Infosys) did not follow the procedures in the settlement with the Bansal. They (the management) should have gone to the Board of directors, got it approved and only then they should have signed them (severance pact papers). That they (Infy management) did not do,” said the HR expert.
According to him, generally, in a consent application, it is already decided by Sebi on what would be the settlement before it is filed.
“Before the consent plea is filed, they (the company involved) have an informal discussion with Sebi, where it is decided what could be penalty. They decide what could be fine amount or the penalty based on the nature of the offense,” said Lakshmikanth.
According to him, Infosys must have already submitted summary of various investigations and settlement documents to Sebi.
“The settlement they have arrived at and whatever investigation summaries they have must have been given to Sebi,” Lakshmikanth told DNA Money.
The expert, who is also a minor investor in the IT bellwether, estimated that the penalty could be roughly to the tune of Rs 30 crore or so.
SETTLEMENT BLUES
- Issues pertained to lapses in procedures, and not a financial crime said an HR expert
- It is very likely that Sebi may give its consent for settlement, the expert added
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