Phaneesh Murthy: Let off by Infosys, sacked by iGate over sexual harassment charges
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.