Home / Companies / People /  iGate sacks Phaneesh Murthy over relationship with employee

Bangalore: Phaneesh Murthy, sacked by software services provider iGate president and chief executive over accusations of improper sexual conduct and an allegation of sexual harassment by a female employee, said on Tuesday that the charges were “completely false" and that he would contest the case if it went to court.

In a conference call with reporters, Murthy said that the allegations were made against him a few days ago by an iGate employee. Murthy said he had informed the board chairman about a relationship with her before she made her complaint.

“The charges are completely false, but it is pursuant to a relationship I had with her. Based on that, the company decided that I had violated the policies and terminated my employment. I also don’t believe that I have violated any company policy," Murthy said on the call.

Murthy said the employee had not filed a case in court and he would contest the matter if it went to court.

“My course of action will be more reactive at this moment," he said. Murthy, who said the relationship with the employee lasted a few months, also added he had not decided whether to contest his termination from the company and would take a decision after speaking to his lawyers.

“I haven’t spoken to my lawyers yet. At this moment, all my options are open," he said.

Earlier on Tuesday, iGate said it sacked Murthy after an ongoing investigation found he had an improper sexual relationship with a subordinate employee that wasn’t disclosed, violating the company’s policy.

The decision was made as a result of an investigation, by outside legal counsel engaged by the board, of the facts and circumstances regarding a relationship Murthy had with a subordinate employee and a claim of sexual harassment, iGate said in a statement.

The investigation has not uncovered any violation of iGate’s harassment policy, the company added.

“The board deliberated extensively on this matter," said Sunil Wadhwani, co-founder of the company and co-chairman of the iGate board.

“We recognize the significant contributions Mr. Murthy has provided over the past 10 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," Wadhwani said.

iGate, based in Fremont, California, appointed company veteran Gerhard Watzinger as Murthy’s interim replacement, with immediate effect. The company said it had appointed a search committee within its board of directors to identify and select a new president and chief executive, adding that it does not plan to make any additional structural or executive leadership changes in the near future.

Watzinger, who was executive vice-president and chief strategy officer at Intel Corp.’s McAfee security division prior to this, has taken himself out of consideration for a permanent role as the company’s chief executive and will serve in an interim role till the selection process is complete.

This is not the first time Murthy has been involved in a sexual harassment case. At Infosys Ltd, where he served as global head of sales, Murthy faced sexual harassment allegations by his personal secretary Reka Maximovitch that were settled by the company for $3 million in May 2003 and led to his departure from the company.

“I think it’s pretty sad for all the people who know him. But he has been punished for whatever he has done," said T.V. Mohandas Pai, who worked with Murthy at Infosys and is currently chairman at Manipal Global Education.

Human resources experts tracking company policies at top multinational and Indian IT firms said the corporate sector has become more sensitized to women’s rights and takes a stronger stance than it used to on sexual harassment complaints.

“At the top level there is a strong view of gender equality. Any sexual offence is a crime and the top management of corporate houses are aware about the seriousness of it," said Pritam Singh, a former director of the Indian Institute of Management, Lucknow, who is currently the director general of International Management Institute (IMI), an RP Goenka group-promoted business school in Delhi. “But any allegation of sexual offence needs to be investigated properly as it can ruin somebody’s career and reputation."

Pai, who worked with Murthy at Infosys, added that iGate’s decision to terminate Murthy’s employment was a sign of the stringent anti-sexual harassment policies that are in place currently in the IT sector. “The fact that a company has taken such an action against its CEO is a testimony to the fact that anti-sexual harassment policies work well at IT companies. And they’ve put in place processes to safeguard the interest of all employees in IT companies. So it’s a testimony to the fact that in at least one industry the process actually worked and they’ve taken action," said Pai, former human resources director at Infosys.

Prashant Nanda contributed to this story.

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