Veritas Software First To Get Rbi Nod For Stock Options

The employees of Veritas Software India Pvt Ltd, a subsidiary of the US-based Veritas Software, have become the first in the country to exercise their right to stock purchase incentives offered by the parent company.

Although several foreign companies with subsidiaries in India have started offering the stock option an incentive to their employees to buy shares in the parent Veritas Software India has become the first company to get the Reserve Bank of Indias (RBI) permission to undertake stock purchase in the US.

The RBI authorities, however, allowed the employees of Veritas Software India to buy shares of the parent company on the condition that the stock purchase will not result in the outgo of foreign exchange from India.

 

As a result of the tough RBI condition on overseas stock purchase, Veritas Software had to undertake buying and selling of shares on the same day on behalf of its Indian employees.

For the four employees of Veritas Software India who recently vested their right to stock purchase, it was a bonanza as they earned an average of $1000 from the deal. They were given the stock option at $16 per share two years back and the selling price was $52 per share.

It took us six months to get the RBI permission to undertake stock purchase and even after the nod came it was a conditional one and therefore we had to request Veritas Software to buy and sell stock on behalf of the employees, Jayashree Joglekar, director of Veritas Software India said.

Since the shares of Veritas listed on the Nasdaq have been on the upswing, most of the 45 employees working for the Indian subsidiary have decided not to go in for stock purchase and instead hold on to their stock option right. Going for stock purchase would compel them to sell on the same day on account of the strict RBI condition.

Veritas Software is a $140 million corporation with software centres in the US and Pune (its only software development facility outside the US).

The company designs, develops and markets enterprise storage management and high availability software products that manage both on-line and off-line data for business-critical computing systems. Its OEM partners include HP, Microsoft and Sun.

In Pune we have invested $1 million for the R&D facility and plans are afoot to expand it by increasing the software engineers from 45 to 71 in the current year, said Fred van Den Bosch, executive vice president (engineering) of Veritas Software.