IT major Infosys Ltd has paid Rs 34 lakh to settle a case related to alleged lapses regarding a severance payment done in 2015, Securities and Exchange Board of India (SEBI) said in an order.
"The proposed adjudication proceedings for the defaults... are settled," the market regulator said in a settlement order dated February 15. "SEBI shall not initiate any enforcement action against the applicant for the said defaults," it added.
SEBI, in 2017, had issued a notice seeking to initiate adjudication proceedings against the company. The notice was with regard to the examination in the scrip of Infosys.
During the examination, SEBI probed the issues pertaining to severance payment made by Infosys to its former Chief Financial Officer Rajiv Bansal who had resigned from the company on October 11, 2015.
"The examination prima facie revealed that the severance payment was not in accordance with the remuneration policy and the same was without the approval of the Nomination and Remuneration Committee," it said.
Further, the payment had no prior approval of Audit Committee and the company failed to make detailed and timely disclosure of the severance agreement.
As per an Economic Times report, Infosys had filed a settlement application with SEBI in November 2017.
“It is a negotiated settlement between the capital market regulator and an entity by paying a penalty or by undergoing a voluntary ban from the stock markets. Infosys, which has most of its shares traded on the exchanges, opted for a settlement,” the ET report states.
"The High Powered Advisory Committee in its meeting held on February 26, 2018 considered the settlement terms proposed and recommended the case for settlement upon payment of Rs 34,35,000 by the applicant towards settlement charges for the aforementioned defaults," it said.
The Panel of Whole Time Members of SEBI accepted the recommendation on January 22 this year and Infosys made the payment on February 4.