India's largest IT services firm Tata Consultancy Services will consider a share buyback proposal during its board meeting scheduled this week. "The board of directors will consider a proposal for buyback of equity shares of the company, at its meeting to be held on October 7, 2020," TCS said in a regulatory filing on Sunday night.
The company has not revealed any more details regarding the share buyback plan. The tech giant is also likely consider the second quarterly financial results and may announce the second interim dividend to its equity shareholders. Before this, TCS had undertaken a share buyback plan worth Rs 16,000 crore comprising 7.61 equity shares in 2018.
In a separate filing on Sunday, TCS said it would be providing Rs 1,218 crore as an exceptional item in the second quarterly results with regard to the EPIC Systems Corporation matter.
In October 2014, EPIC had filed a legal claim against TCS in the court of Western District Madison, Wisconsin, the US, alleging infringement of Epic's proprietary information.
"On August 20, 2020, the US Court of Appeals, 7th Circuit, Chicago, returned a verdict on the appeal filed by TCS, reducing the damages award. The Court held that the punitive damages award of $280 million is constitutionally excessive, vacated the punitive damages award and directed the Trial Court to reassess the punitive damages. The Court upheld the compensatory damages award of $140 million," TCS has said.
TCS said it has the correct and the strongest possible arguments in its favour and the order and reduced damages are not supported by facts presented during the trial. "In September 2020, TCS has filed a petition seeking re-hearing on both compensatory and punitive damages," it added.
EPIC has also filed a petition seeking re-hearing on a decision of the Appeals Court invalidating award of punitive damages exceeding the amount of compensatory damages, the company said. "The provision in the books for legal claim is being made as a matter of prudence," the company said.
The matter relates to a US grand jury order that slapped two Tata group companies - TCS and Tata America International Corp - with a $940 million fine in a trade secret lawsuit filed against them by EPIC in April 2016.
On October 1, 2017, TCS said the court significantly reduced the compensatory and punitive damages of $940 million to $420 million.
In May this year, Securities and Exchange Board of India (SEBI) warned TCS to be careful in dealing with disclosure of material information to investors after the watchdog found that the IT major did not prominently display the extent of damages related to a case in the US. The regulator also asked TCS to ensure that it provides adequate, accurate, explicit and timely information to its investors.
With PTI inputs
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