Infy visa case may be headed for settlement

Litigant Jack Palmer not to place any pre-conditions

In what comes as a ray of hope for a smooth settlement in the ongoing alleged visa fraud case against Infosys, Kenneth Mendelsohn, the attorney of Infosys’ US-based employee Jack Palmer, has said his client would opt for mediation with an open mind, with no preconditions. Earlier, the federal court had ordered counsels of both sides to negotiate an agreement on July 24 before the trial next month.

“The judge ordered Palmer and Infosys to attend a mediation, to be conducted by a US magistrate judge….There is obvious animosity between the parties, but the judges expect the parties to come into the mediation in good faith, which is what Palmer will do,” Mendelsohn said, responding to a query by Business Standard on whether Palmer would have any precondition before attending the mediation.

However, Mendelsohn said, “With respect to Infosys’ previous claims that Palmer was a lone wolf and just out for money, the testimony of Infosys employees filed with the court proves the accusation was not true.”

Earlier, media reports had said whistleblower Palmer wanted Infosys to first admit its guilt, before an out-of-court settlement.

Infosys has maintained the company was confident in the merits of the case, and this was why it had not made any previous offer of settlement.

In response to an email query, the company stated, “We welcome the judge’s direction to have both parties meet in confidence with a magistrate and mediate the case, because we believe there’s always something to be gained by this process.” The company also said while it would approach mediation with an open mind, “Our decision to participate does not indicate any movement from our previous position that Infosys has not retaliated against Palmer for bringing any suspected incident to the company’s attention.”

Industry experts believe an out-of-court settlement of the case is perhaps the best Infosys can hope for. This is because legal proceedings in the US are tedious and take a long time to be settled. Besides, the ongoing legal battle could well divert the attention of the company’s management, thus affecting business.

“Given the high litigation costs in the US, it is always economically wiser to see if you can settle the case out of court because it takes away a lot of financial constraints and overhang of the case, which affects the management’s time and probably investors’ perception,” said Mrugesh Shah, a partner in chartered accountants firm Mahajan & Aibara, which specialises in corporate governance, risk advisory and management consulting services.

“It is a more practical solution, provided they (Infosys) don’t require to admit any wrongdoing or guilt,” he added.