NEW YORK: iGate, the US-based outsourcing company, has sacked its CEO Phaneesh Murthy over a sexual harassment case.
The sacking follows the outcome of an investigation into Murthy’s relationship with iGate investor relations head Araceli Roiz, 31, and her complaint of sexual harassment against Murthy last week.
In a statement, iGate said, “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.’’
iGate co-founder and co-chairman Sunil Wadhwani said the board deliberated the matter extensively before sacking Murthy. Wadhwani said, “We recognize the significant contributions Mr. Murthy has provided over the past ten years in helping to 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. However, as a result of this violation of iGATE policy, we asked Mr. Murthy to step down.”
But Phaneesh Murthy denied the allegations of sexual harassment and called it extortion. In a media coference call, Murthy said, “There is no merit to the sexual harassment claim. The charges are completely false. They have an easy way to collect money. It’s the same lawyer and law firm who represented the other woman in 2002. Now, do you think the odds are different.”
Murthy admitted that he had been a relationship with Roiz for the past few months, adding, “It’s was more than friendship. Let’s leave it as a personal relationship.” As to why the relationship ended, he said a little sarcastically, “When you figure out women, let me know. I will take lessons from you.”
While according to the iGate investigation, Murthy violated iGate policy and employment contract for not reporting the relationship, the sacked CEO said he actually informed the chairman after he ended the relationship.
However, he added, “The timing of the information to the chairman is I believe what they considered as the grounds for my termination. I had informed the chairman many weeks ago. Perhaps I should have informed the chairman earlier than when I did.”
Murthy alleged, “I was not given an opportunity to present my case.” About his course of action, he said, “I haven’t spoken to my lawyers or advisers yet. All this happened a few hours after the close of the day in California.”
The iGate board has appointed Gerhard Watzinger as president and CEO on an interim basis.
Murthy had joined iGate after leaving Infosys under almost similar circumstances after a sexual harassment case was filed against him.
Murthy was head of sales and marketing for Infosys Technologies in the US when Reka Maximovitch, his former executive secretary, filed a case of sexual harassment against him in December 2001, alleging that he “pressured her to engage in a sexual relationship with him.’’ She had filed the case after her termination by Infosys.
Later, the case was settled out of court that cost Infosys $3 million.
Murthy joined iGate in 2003.
He holds a B.Tech degree from IIT Madras and an MBA degree from IIM Ahmedabad.