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Whistleblower's exposé says Rajiv Bansal walked out of board meet on Panaya acquisition

Binjal Shah
21st Feb 2017
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Another whistleblower – an anonymous source who claims to be close to ex-CFO Rajiv Bansal - has brought to light a significant revelation about the fiercely debated Panaya acquisition made by Infosys in February 2015. At the rare press conference held by Infosys last Monday – convened in order to address a slew of issues that the Infy board is currently faced with – R. Seshasayee, the chairman of the board, had stated that Rajiv Bansal, who was the CFO when the acquisition took place, had signed off on the deal. But the whistleblower claims that Bansal had, in fact, walked out of that board meeting in a sign of protest.

From left to right: N. R. Narayana Murthy, Vishal Sikka and R. Sheshasayee. Source: Infosys.com

The source chose to share this information with media outlets, as well as with regulators SEBI and the US' SEC. In his exposé, he wrote that Rajiv Bansal was not convinced by the reasoning behind the acquisition of Israeli firm Panaya, and was especially unhappy with the amount arrived upon by them.

While the firm was bought out for a total of $200 million, its market valuation was pegged at an amount much lower than that – close to $162 million – by Israeli Growth Partners, one of the firm's investors.

Here is an excerpt from the email, as reported by Mint, about what happened at the board meeting a day before the acquisition was completed. "The Board of Infosys blindly approved the deal. The CFO of Infosys at that point of time, Rajiv Bansal, refused to sign off on the deal and, in fact, walked out of the discussion during the board meeting to approve it."

When questions about Panaya's acquisition were raised at the presser last week, Seshasayee commented on the issue, claiming that Rajiv Bansal, who was the certifying officer during the deal, had certified the accounts. Moreover, he stated that the Panaya acquisition was “done through a process”, and that they had got gotten a third-party valuation done by Duetsche Bank, with the amount they arrived at being commensurate to that.

The presser was mainly called to order after the dirty laundry between N. R. Narayana Murthy and the current board was aired by the former CEO in public - when he went to the media with his opinion that the company might be skirting issues of corporate governance, what with the exorbitant severance packages awarded to two top level executives and Vishal Sikka's lofty package as CEO.

Sikka currently takes home $11 million, the fixed component of which is $4 million, and the board was also under fire for awarding an unusually high severance package to Rajiv Bansal, who quit in October 2015. The Rs 17.38 crore (amounting to 24 months of pay) he received was being touted by many as possible ”hush money”, which was an allegation that Seshasayee said he was “deeply disturbed by” at the presser. The payment was stopped after roughly two instalments, at Rs. 5.2 Crore, following opposition from the company's founders.

The acquisition of the platform was in line with Vishal Sikka's Vision 2020 for Infy, wherein he plans to gain $16 billion in revenue through their traditional offerings - services - and also an additional $4 billion, $2 billion each, from platforms and acquisitions. Currently, their revenues from platforms are close to $600 million, of which Finacle itself contributes to $550 million.

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