TCS Board to consider share buyback proposal on Wednesday

Tata Consultancy Services (TCS) has said that its board of directors is scheduled to meet on Wednesday, October 7, 2020, to consider the share buyback proposal. No other details of the buyback plan were disclosed.

India's largest IT Services firm in a regulatory filing has said, "TATA CONSULTANCY SERVICES LTD. has informed BSE that the meeting of the Board of Directors of the Company is scheduled on 07/10/2020, inter alia, to consider and approve Pursuant to Regulation 29(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, this is to inform you that the Board of Directors will consider a proposal for buyback of equity shares of the Company, at its meeting to be held on October 7, 2020."

Information technology consulting company will also consider its financial results for the second quarter of the financial year 2020-21 (Q2FY21) and declaration of a second interim dividend to the equity shareholders at that meeting.

In a separate regulatory filing, the IT firm has said, in the EPIC Systems Corporation matter, the company would be providing Rs 1,218 crore as an exceptional item, in the financial results for the three and six months ended September 30, 2020, to be announced on October 7, 2020.

On August 20, 2020, the US Court of Appeals, 7th Circuit, Chicago, returned a verdict on the appeal filed by TCS, reducing the damages award. The Court held that the punitive damages award of $280 million is constitutionally excessive, vacated the punitive damages award and directed the Trial Court to reassess the punitive damages. The Court upheld the compensatory damages award of $140 million.

TCS is legally advised that it has the correct and the strongest possible arguments in its favour and the Order and reduced damages are not supported by facts presented during the Trial. In September 2020, TCS has filed a petition seeking a rehearing on both compensatory and punitive damages.

EPIC has also filed a petition seeking a rehearing on the decision of the Appeals Court invalidating award of punitive damages exceeding the amount of compensatory damages. The provision in the books for a legal claim is being made as a matter of prudence.

In October 2014, EPIC had filed a legal claim against TCS in the court of Western District Madison, Wisconsin alleging infringement of Epic's proprietary information.

The matter relates to a US grand jury order that slapped two Tata group companies, TCS and Tata America International Corp, with a fine in a trade secret lawsuit filed against them by EPIC in April 2016.