Phaneesh Murthy: Let off by Infosys, sacked by iGate over sexual harassment charges
Moneylife Digital Team 21 May 2013

For a second time, Phaneesh Murthy has been sacked over charges of sexual harassment ending a stunning comeback by the marketing expert

Phaneesh Murthy, the once upon a time blue-eyed boy of the information technology (IT) industry has been sacked by iGate Corp, after having to quit Infosys over a sexual harassment scandal. A statement by iGate innocuously says that Murthy was sacked for not disclosing his relationship with a subordinate. This follows investigation for sexual harassment against Murthy, one of the country's best IT marketers. Murthy's second sacking over the sexual harassment issue has stunned the industry. Ironically, when Phaneesh Murthy was thrown out of Infosys, he left with enormous anger and claimed that he was wrongfully targeted.


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 Murthy had with a subordinate employee and a claim of sexual harassment. The investigation, which is ongoing, has reached the finding that Murthy’s failure to report this relationship violated iGATE’s policy, as well as Murthy’s employment contract. The investigation has not uncovered any violation of iGATE’s harassment policy."


However, Murthy has denied all charges and allegations levelled against him. Speaking with reporters, he said, "I have not violated iGate policy and the charges against me are completely false."

“The Board deliberated extensively on this matter,” said Sunil Wadhwani, co-founder and co-chairman of the board of iGATE. “We recognize the significant contributions 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 Murthy to step down.”


While iGate used non-disclosure of information about relationship as reason to sack him, Murthy on the other hand claimed that he had informed the company chairman about his relationship with a female colleague. "I had informed the chairman about my relationship with this woman," Murthy said.


iGate, which has bulk of its employees in India, has appointed Gerhard Watzinger as interim chief executive with immediate effect. No details are available as yet, but the exit will provide plenty of debate.


Ashok Trivedi, co-Founder and co-Chairman of the board of iGATE, said, “Murthy’s departure was not related in any way to the company's operational or financial performance, both of which remain strong. iGATE will continue to focus on creating value for our customers and shareholders, while upholding the highest ethical standards in every area of our business. We are fortunate to have Gerhard Watzinger returning to iGATE during this transition. Watzinger possesses deep knowledge of iGATE’s business and he assumes his responsibilities as our Interim President and CEO with the full support of the Board.”


Alleging extortion behind the motive, the sacked chief executive of iGate, said, "The same lawyer who had represented the woman in 2002 is representing the woman this time as well. This is without doubt a case of extortion and you can spot the difference."


Earlier, in 2003, Infosys, India's second largest IT company, paid $3 million or about Rs15 crore for an out of court settlement in the sexual harassment lawsuit against Murthy who was the company's member of the board at that time.

Murthy then joined iGate Global Solutions (formers Mascot Systems) as a CEO and has grown the company rapidly after restructuring it. The high point of his career in iGate was the acquisition of Patni Computers in 2011, which was the company from which NR Narayana Murthy and his friends exited to form Infosys Technologies and went on to create history.


The Infosys lawsuit was filed by Phaneesh's executive secretary Reka Maximovitch, a Bulgarian American national, complaining of sexual harassment and wrongful termination of her employment.


Infosys paid $570,000 to Phaneesh Murthy as part of the final settlement of his dues when he resigned in July 2003 as head of Infosys' worldwide sales and marketing and from the company's board of directors.


Addressing media persons in 2003, NR Narayana Murthy, the then chairman and chief mentor of Infosys, said, "Phaneesh did not disclose to the company management, as an important functionary, that he had a relationship with Maximovitch and also of the fact that she had filed in the court for a restraining order against him".


In 2004, while he was chief executive of GATE Global Solutions, Murthy settled another sexual harassment lawsuit out of court for $800,000.


Phaneesh Murthy is an alumni of the Indian Institute of Management (IIM), Ahmedabad, and Indian Institute of Technology (IIT), Chennai. In January 2003, he founded Quintant Services, a BPO company, which was later acquired by iGate Global Solutions. In August 2003, he became chief executive officer of iGate Global Solutions.


Two years ago, Phaneesh Murthy helped iGate acquire Patni Computer services, one of the oldest IT company from India, for $1.22 billion.

nagesh kini
1 decade ago
That PM should commit the same 'indiscretion' the second time over doesn't stop him from doing it all over again.
He got away for the first time just because Infosys picked up the tab. He unashamedly entered into newer relationship, which he thought he could get away by merely 'informing' the Chairman.
What is the big deal with the victim retaining the same lawyer? Some one very conversant with the facts of the case and a track record to deliver rather that someone who will take long and delay the entire process, is always preferred.
nagesh kini
1 decade ago
That PM should commit the same 'indiscretion' the second time over doesn't stop him from doing it all over again.
He got away for the first time just because Infosys picked up the tab. He unashamedly entered into newer relationship, which he thought he could get away by merely 'informing' the Chairman.
What is the big deal with the victim retaining the same lawyer? Some one very conversant with the facts of the case and a track record to deliver rather that someone who will take long and delay the entire process, is always preferred.
avinash bhakay
1 decade ago
It is typically a use and throw attitude which has been adopted by the management. Looks like he was done with his contributions and now needs to be booted with a reason! Can be for monetary gains which are very attractive in the U.S. areas. Anyway not indicating that woman's dignity also needs to be protected. Difficult to conclude but should not be used as a scape goat!!
1 decade ago
It is sad that the brilliant ones fall from grace due to their unbecoming inclinations. But, one needs to examine how a person can claim to be a victim of abuse after being in an intimate relationship, if that was with consent? (sibi-cyberdiary)
Naresh Nayak
1 decade ago
Personally I want to know why is the same lawyer representing the second woman? What is the amount of settlement that they are asking? Phaneesh Murthy could have been trapped by the second woman and she could be a gold digger. I am sure she was tutored by the law firm after entering into a relationship with Phaneesh. Unfortunately in the area of sexual harassment facts could be more circumstantial then a straight fact since there are no traces of the crime. Personally I want to know what is the extortion amount.
Sucheta Dalal
Replied to Naresh Nayak comment 1 decade ago
The same lawyer argument is strange. Just as all celebrities go to the same lawyer - Mrinalani Deshmukh - because she handles divorces with grace. Or for certain criminal matters you go to the "same" lawyer who has a successful track record. So too will a woman facing similar charges go to the same lawyer.
What is more important is that the lawyer got a settlement in the Infosys case without dragging the woman through a court trial. I would think that fact alone and the $3million settlement would ensure that many women in a similar predicament would go to the same lawyer. And if the person accused is the same and can argue with all the facts and background, wouldnt any woman who wants to press charges against Phaneesh Murthy go to the same lawyer?
Please google and check two facts which I wrote about in 2003 in Express: First that Phaneesh made similar statements and snide remarks then too.
Second, Infosys issued a point by point rebuttal about it. He had claimed that he was willing to fight, in fact, he was lucky to get away without paying a penny personally.
Naresh Nayak
Replied to Sucheta Dalal comment 1 decade ago
Personally several companies have had to face this. Mark Hurd of Hewlett Packard too got the sack because of harassment a woman colleague. Paying damages are not a problem, losing the executive disrupts business continuity and I put myself in the shoes in the board and realised it was a very painful decision to let him go. Phaneesh is a company creator. When he got out of Infosys he created iGate and iGate ultimately purchased Patni for $1.2 billion. Now that is a very remarkable achievement for a man who started a company from scratch. Anyway this case has ensured Phaneesh will never get into another company as a CXO. If Phaneesh hadn't been thrown out of Infosys, India would not have had iGate (Revenues of USD 1.07 billion in 2012 with a 90% share price return in 5 years to shareholders in 2013).

I know for a fact that several woman executives have to go through an ordeal with managers. However a lot of it gets hushed. Women bear with it all for the sake of their career. There is sometimes no redressal since the manager he may get away with a rap on the knuckles since management thinks sacking him will disrupt business continuity. I went for lunch with a man manager and two women colleagues and the things he said to one of the newly married woman colleague was shocking! It was done right in front of me and the other woman. However the other woman used great tact to chide him for his remarks. In the US that man would have lost his job but in India it's all chalta hain. The best thing is for companies to take ALL sexual harassment complaints seriously and give the manager the sack. This will ensure the higher executives stay in line at least for the sake of their careers. You only have to look at the no. of sexual harassment complaints within each company to see their tolerance of it. Surely the ones having the highest no. of complaints lodged are more serious about it noting that the mix of the man population's affinity to do sexual harassment is the same in all companies.
srinivasan M
Replied to Sucheta Dalal comment 1 decade ago
From a man's perspective, how come an extremely well educated adult woman who enters out of her own free will(without a gun on her forehead) into a relationship with a man(may be out of love,passion or for monetory gains) suddenly decides to make the relationship as a corporate relationship and turn it into a sexual harressment claim. I can understand if it was a personal domestic violence case or any such thing. The company as usual like any other co,doesn't worry who is at fault, their immediate reaction is loss of profit(due to claims) or reputation. Why should the co or the law encourage personal fights into corporate level damages. I am unable to fathom this. I feel the hard work of a man has been in the Co. been ruined by personal grudges.
Sucheta Dalal
Replied to srinivasan M comment 1 decade ago
Well check the facts. What you say is not true even in the first instance of Reka Maximovitch... or whatever. she had taken a restraining order against him.
He then paid another woman $800,000- again an Infosys employee.
After that his loyal wife Jaya stood by him in public and helped him make a fresh start.

Then he starts another "relationship" - again in office?
If the man is out of control, he can always buy sex and is unlikely to get sued.
That he feels the need to start affairs in office after failing to learn from two previous instances is abuse of power combined with stupidity -- its not just a case of inability to keep his trousers up.

From any thinking person's perspective -- can you tell me why someone as clever as phaneesh murthy would allowing himself to be in the position thrice?

It is like he is waiting to be robbed. And without knowing the women in this case, I would say, he is a sitting duck. You talk about personal grudge when the guy is caught 3 times, humiliated, told a pack of lies last time?
Naresh Nayak
Replied to Sucheta Dalal comment 1 decade ago
Dear Ms. Sucheta, You assessment of the situation is correct. It takes an outsider with a view of the inside to say it the way it is. Phaneesh has used his power to form intimate relationships inside his own company and he is inviting trouble. I read somewhere that relationships formed while working can become dangerous and a lot of them become sexual harassment cases.

I hope he starts another company. We must acknowledge that the man who has great weaknesses has great strengths too and hope he is able to strike gold again.
Mathew Thomas
1 decade ago
Habits, they say, die hard. Second time unlucky. Well, it is imprudent to test your luck in such matters.
1 decade ago
Something seems to be amiss here.
More than what meets the eye.

Do you think Phaneesh will be so stupid to be doing this over and over again.

What about Phaneesh's claim that he had kept his Chairman informed about his relationship??
Sucheta Dalal
Replied to rajeshpai comment 1 decade ago

Read carefully. A few weeks ago? After it was clear that the woman was going to initiate action maybe?

Wonder what his wife has to say this time. Nobody thinks about how he is openly flaunting his relationship after the previous episode humiliated his family. What on earth is this rubbish about having told the chairman. Why was he having an affair in the work place? And if it was love, surely he would have asked her to switch jobs to avoid a repeat of Infosys
1 decade ago
Leopord does not change spots and if it has tasted human blood then it will thrive for more. this once again proves education at IIT and IIM and Infosys failed to teach Phaneesh Murthy morals.

"I had a friendship with my colleague which lasted for three years," said David Davidar, the 'golden boy' of the publishing industry

At the Frankfurt Book Fair last October, according to the claim, Davidar appeared at Rundle's hotel room door "wearing excessive cologne, with buttons on his shirt undone down his waist."

Rundle claimed she climbed on a windowsill to avoid her boss and asked him to leave. "He forcibly pulled her off the ledge and grabbed her by the wrists, forcing his tongue into her mouth," the report said.
Ajit Thomas
Replied to TIHARwale comment 1 decade ago
Well it is assumed that people who enter the portals of IITs and beyond are of good moral standing. Only the rest needs to be taught. That assumption is wrong. Looks like Sunday School needs its more than its share of importance...
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