Financial Daily from THE HINDU group of publications
Tuesday, May 13, 2003
Financial Daily from THE HINDU group of publications Tuesday, May 13, 2003 |
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Gender Info-Tech - Software No link between settlement and ADS issue: Infosys Our Bureau
BANGALORE May 12 INFOSYS Technologies on Monday said the out-of-court settlement that it reached with a former employee, Ms Reka Maximovitch, in a sexual harassment and wrongful termination suit could not be linked to its proposed ADS issue as alleged by Mr Phaneesh Murthy, its former global sales head. In a statement here, Infosys termed the assertions made by Mr Phaneesh Murthy as blatantly false and stated that he "voluntarily" signed the settlement clauses put forward by it. The company had offered Mr Phaneesh Murthy the right to stay in the legal battle and fight the case himself to clear his name even as the company was ready to settle it out-of-court. According to Mr R. Nithyanandan, Infosys' Corporate Counsel and legal head, Mr PhaneeshMurthy agreed to the clause of Infosys retaining the right to sue him, that he would not have recourse to insurance in case such legal actions were initiated against him and the company would not be bound by any term of confidentiality with respect to the settlement of the case. Further, Infosys also said that it has not received any notices on demand of shares vested to Mr Phaneesh Murthy and it was unaware of the lawsuit filed by him in this regard. Under the company's 1994 ESOP scheme, every employee is required to meet all the liabilities including taxes, on the grant of the options. Every employee has entered into an agreement with the Infosys Employees Welfare Trust (EWT) to indemnify the EWT and the company for any tax liability and as part of such indemnity agreed to keep a part of his/her shares with the EWT to meet any tax liability. The EWT holds 25,600 shares belonging to Mr Phaneesh Murthy as part of a tax indemnity he had signed on December 15, 1997. The company has not singled him out for this indemnity or withholding of shares. More than 1,000 employees, who received stock options under the 1994 ESOP Plan, have signed the same indemnities and their shares are also being withheld under a similar tax indemnity, the company said in a statement. The tax liability is not settled and is currently being agitated in the Karnataka High Court. As a result, the EWT has retained this indemnity till the matter is resolved fully and finally. "Signing such an indemnity is a condition for participation in the ESOP. Mr Phaneesh Murthy has been aware of these facts since 1997 and his lawyers were again given this data in March 2003," the statement said.
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