Board must come clean: Ex-Infosys CFO wants forensic audit of Bansal payout

There is no subjectivity. Somewhere the board has to come clean, said V Balakrishnan

A former board member of Infosys, V Balakrishnan, has reiterated the call for company chairman R Seshasayee to step down, saying the explanations by the board on the severance pay to former executive Rajiv Bansal were “disappointing”, and asked for a forensic investigation of the transaction and make the report public.

On Monday, Seshasayee and chief executive Vishal Sikka, who had differences with Bansal, repeatedly asserted that the severance pay to the former chief financial officer (Bansal) was handled with transparency. They also said the processes had been changed, with the contracts of senior management persons reworked to align their compensation with the local rules of the location of the employee. 

Balakrishnan, who was company secretary and later chief financial officer of Infosys before he quit the company in late 2013, said that the founders would continue to push the board to come clean. He also recommended that D N Prahlad, a former Infosys employee and a relative of co-founder N R Narayana Murthy and appointed board member last year, should be made interim chairman.

"They have still not answered the key question as to what the need for the payment was. It was a voluntary exit, he (Bansal) resigned from the company, served the three-month notice period and was given a generous severance package violating the contract," Balakrishnan said in an interview. "Why was the payment stopped once the founders raised the issue? If they had a contract to pay, it is also a violation to stop it."

An Infosys spokesperson declined to comment on the matter. "These are all governance issues. Founders will continue to raise them, they will make the board accountable," said Balakrishnan. "There is no subjectivity, somewhere the board has to come clean as it is their fiduciary responsibility to be accountable to shareholders."

Infosys has maintained that it had engaged itself with the founders, got their inputs but took the final call based independently. It also reiterated that the board would continue to maintain the "gold standards" of corporate governance set by the founders of Infosys.

Seshasayee told investors on Tuesday evening: "We have received some names for induction to the board. We will give the due respect to these proposals and take decision in the interests of all the shareholders." 

Seshasayee said on Monday he had reached out to the company's billionaire co-founders to see to it that the rift between them and the management over corporate governance issues did not come out into the open. Sikka, along with Seshasayee, addressed investors for the second day in a row. On Monday, Seshasayee said that all whistleblower complaints would be investigated independently. He also maintained that he would not quit the company, saying it was the board's decision to appoint him chairman. "Shareholders and the board have asked me to do a job. As long as they don't ask me... I will do my job," Seshasayee said.

Murthy, who first raised concerns in June last year and then made public his disappointment with corporate governance practices at Infosys early this month, has maintained that his concerns have not been addressed by the firm's board. He has called for accountability for the lapses at the board, saying good leadership demands taking corrective action for lapses.

"They are all good intentioned people of high integrity but obviously being human even good people sometimes make mistakes This is one such case. But good leadership demands that they listen to all concerned shareholders, re-evaluate their decision and take corrective action," wrote Murthy in an email. "I hope they take corrective action soon and improve governance for a better future for the company." 

WHAT’S THE UPSHOT?

• Balakrishnan, who was company secretary and later chief financial officer of Infosys before he quit the company in late 2013, said the founders would continue to push the board to come clean
• He also recommended that D N Prahlad, a former Infosys employee and a relative of co-founder N R Narayana Murthy and appointed board member last year, should be made interim chairman

With additional inputs by PTI