A day after a whistleblower urged the Securities and Exchange Board of India or Sebi to not allow Infosys to settle former CFO Rajiv Bansal's severance case via 'back door', former company chief financial officer V Balakrishnan today said that it was not a matter of whistleblower's emotions, but of legality for the regulator to decide on denying company's consent plea.
Balakrishnan in a conversation with PTI said: "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 Sebi as a regulator thinks and decides is all that matters."
Balakrishnan said this after the whistleblower objected to Infosys' settlement plea to Sebi and requested the market regulator to junk it. Balakrishnan's remarks came a day after former Infosys Board member and chief financial officer T V Mohandas Pai said that the IT firm's move to settle severance pay dispute with Sebi was 'perfectly fine'.
However, he disagreed with the whistleblower who had asked the market regulator to prosecute Infosys management and the Board. According to Pai, whistleblower's request to prosecute the management as well as the board should be ignored. "Settlement is a normal process. Anybody can file for settlement consent decree from Sebi. There are very clear norms. Sebi can do it, it's Sebi's prerogative," Pai said on Sunday.
The whistleblower in the letter had said that the company's internal probe was a 'real mockery of justice' as the management that precipitated excesses supervised it. The letter requested the Sebi to prosecute the Infosys board and management both for this act.
Pai said that consent decrees are a very normal part of any capital market. "It happens all the time in the US. It happens in all capital markets because some things are difficult to prove; companies don't want to go through ordeal of a regulatory action," he said, explaining that in capital markets all over the world, companies (do) file for consent so they get over any regulatory action where there is no fraud, misrepresentation or criminality.
"So, there is no criminality and deliberateness. It's perfectly fine for the company to file consent," Pai said. He further said that the matter in Infosys' case relates to lack of adequate and proper disclosure. However, the whistleblower has argued that a settlement was similar to 'backdoor agreement', and if Infosys is allowed to do so, then 'no whistleblower in future will take the pain to expose any malpractices in the corporate sector'.
Last week, India's second largest IT firm filed an application with Sebi to settle the issues around Rajiv Bansal's severance pay. In a regulatory filing to the BSE, Infosys said: "The settlement application process is based on an undertaking that the applicant will neither admit nor deny the finding of fact or conclusion of law."
The company had agreed to pay Bansal a severance package of Rs 17.38 crore or 24 months of salary, but it suspended the payments after he got Rs 5 crore as co-founder NR Narayana Murthy and Pai objected to the move and termed it 'excessive'. While Murthy called it a 'hush money', Mohandas Pai asked the Infosys board to explain severance pay in detail.
The severance pay was agreed during the tenure of former Infosys CEO Vishal Sikka. The issue came to fore when NR Murthy, Kris Gopalakrishnan and Nandan Nilekani wrote to the board expressing their concerns over pay hike to Sikka and the severance package offered to Rajiv Bansal.
(With Inputs from PTI)