Murthy: dogged by controversy.
Agencies/Mumbai
Outsourcing company iGate Corporation said it had sacked its Chief Executive Phaneesh Murthy for not disclosing a relationship with a subordinate after investigating one of India’s best-known IT executives for sexual harassment.
Murthy was replaced with immediate effect by interim CEO Gerhard Watzinger, iGate said. Murthy was forced to quit India’s second biggest software exporter Infosys Ltd in 2002 following a sexual harassment lawsuit, which was settled out of court.
iGate and other smaller IT outsourcers compete with Indian heavyweights such as Tata Consultancy Services, Wipro and Infosys on price to win market share.
“The board’s decision was made as a result of an investigation by outside legal counsel, engaged by the board, of the facts and circumstances surrounding a relationship Mr Murthy had with a subordinate employee and a claim of sexual harassment,” US-listed iGate said in a statement dated May 20.
The investigation showed that Murthy had violated iGate’s policy by failing to report his relationship with the employee, the statement said. Murthy did not violate iGate’s harassment policy, it added.
The investigation was carried out after the company’s investor relations manager Araceli Roiz, a 31-year-old American, gave a written complaint of sexual harassment.
iGate co-founder and co-chairman Sunil Wadhwani in a statement said: “We recognise the significant contributions of Murthy over the past 10 years in helping to establish iGate as a leader in the IT industry. He has worked hard to improve the company’s value, and we greatly appreciate his efforts. However, as a result of our policy, we asked Mr Murthy to step down.”
In a conference call from the US hours after the sack, Murthy denied the harassment charge but admitted to having relationship with the subordinate employee.
“I do believe the charges are completely false. But it is pursuant to a relationship I had with her. Based on that, the company found it fit to believe that I had violated company policy and terminated my employment. I don’t believe I have violated company policy,” Murthy told reporters in his defence.
Over a decade ago (2002), when Murthy was on the Infosys’ board as director and its global sales head, he was accused of sexual abuse by his former secretary Reka Maximovitch, a Bulgarian-American national.
Infosys went for a $3mn out-of-court settlement with Maximovitch to withdraw the sex lawsuit against Murthy and the company, and sacked Murthy later for violating the company’s ethical standards and corporate governance.
Murthy’s exit was not related in any way to iGate’s financial performance which remains “strong”, added the company’s another co-founder Ashok Trivedi. iGates gets the bulk of its revenues from the US.