 "iGate sacks Murthy after sexual harassment claim")
Phaneesh Murthy, a high-flyer of the information technology industry, has come crashing down for the second time in 11 years over charges of sexual harassment. iGate, a Nasdaq-listed IT services firm, has fired Murthy, its president & CEO, following an allegation of harassment by a subordinate in the firm.
Murthy termed the charge levelled by Araceli Roiz, investor relations manager at iGate “a case of extortion”. In a conference call today, Murthy said he was in a “personal relationship with the employee which was more than just friendship” but he broke that relationship several weeks ago and had informed the firm about it. Murthy said he would fight the charges “vigorously” in court, if the employee concerned filed a case.
In 2002, Murthy, then global sales head at Infosys, had faced a sexual harassment case involving his former secretary at the firm. The case cost him his job and Infosys settled the lawsuit out of court for $3 million. Murthy had denied the sexual harassment charges against him that time as well.
Murthy termed the charge levelled by Araceli Roiz, investor relations manager at iGate “a case of extortion”. In a conference call today, Murthy said he was in a “personal relationship with the employee which was more than just friendship” but he broke that relationship several weeks ago and had informed the firm about it. Murthy said he would fight the charges “vigorously” in court, if the employee concerned filed a case.
In 2002, Murthy, then global sales head at Infosys, had faced a sexual harassment case involving his former secretary at the firm. The case cost him his job and Infosys settled the lawsuit out of court for $3 million. Murthy had denied the sexual harassment charges against him that time as well.
READ: Phaneesh Murthy's career till 2007
In a statement this morning, iGate, a Fremont, California-based software services exporter, said Murthy’s employment had been terminated with immediate effect on the grounds that he did not inform the firm of his relationship with the employee, in violation of iGate’s policy, as well as his employment contract. The company, however, said the external probe conducted on behalf of the board did not uncover any violation of the company’s (sexual) harassment policy.
“The decision was made as a result of an investigation by an 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,” iGate said in the statement.
READ: Phaneesh Murthy after the merger of iGate and Patni
Before his unceremonious exit, Murthy was credited with contributing to Infosys’ early growth story during his close to eight years of association with the company. In 2003, when he joined iGate as its global CEO, he was widely touted as a comeback man. He also aggressively pursued strategy to take iGate to the league of bigger rivals like TCS, Infosys and Wipro. He was also instrumental in the successful buyout of Patni Computer Systems, a company much larger than iGate at the time of its acquisition in 2011.
We recognise the significant contributions Mr Murthy has provided over the past 10 years in helping establish iGate as a leader in the IT industry. He has worked hard to improve the value of iGate, and we greatly appreciate his efforts,” said Sunil Wadhwani, co-founder and co-chairman of iGate.
iGate has appointed Gerhard Watzinger (52) as interim president & CEO. Watzinger returns to iGate from McAfee, now part of Intel, where he was executive vice-president and chief strategy officer. The company said Watzinger’s appointment was an interim arrangement while the board had already set up a “search committee” to oversee the process of selecting a new president & CEO.
READ THE INFOSYS STORY: Harassment suit: Phaneesh reaches $800,000 settlement
RISE & FALL OF PHANEESH MURTHY
- Murthy shot into prominence during his stint as head of worldwide sales at Infosys in the early 2000s
- From $2 mn in the early 1990s, Infosys’ revenues jumped to $700 mn during his tenure
- Once touted as CEO material, he quit Infosys after being accused of sexual harassment by a colleague; Infosys settled the suit out of court for $3 mn
- In January 2003, he founded Quintant Services, which was acquired by iGate in August the same year
- He joined iGate; shot to fame again after the firm’s successful acquisition of Patni in 2011