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IGATE sacks CEO Phaneesh Murthy

Bangalore, May 21, 2013, DHNS: 2:11 IST

Colleague levels sexual abuse charge

Phaneesh Murthy, president and CEO of iGate, poses during the World Economic Forum (WEF) in Davos in this January 26, 2013 file photo. Reuters Image

History repeated itself on Tuesday as Chief Executive Officer of IT company iGATE Corporation, Phaneesh Murthy, faced the axe after a woman colleague levelled sexual
harassment charges against him.


The allegations were made by the company’s California-based head of investor relations Araceli Roiz (31), with whom Murthy had a relationship for the “past few months.”

The incident came almost 10 years after Murthy’s unceremonious exit from Infosys for his alleged relationship with a subordinate in violation of company disclosure norms. Back then, the complainant had alleged harassment by Murthy.

iGATE said the board’s decision followed an investigation into the relationship between Murthy and Roiz and her claim of sexual harassment. The investigation concluded that Murthy’s failure to report the relationship was in violation of iGATE’s policy, as well as his employment contract. “The investigation has not uncovered any violation of iGATE’s harassment policy,” the company added.

Murthy said in a conference call on Tuesday that Roiz had sent her statement to the iGATE management “late last week.”

“I learnt that a lady by name Araceli Roiz, who is the investor relations head of iGATE, has filed charges against me. She has sent a letter to the company claiming sexual harassment. The charges were filed late last week. I do believe the charges are completely false but it is pursuant to a relationship I had with her,” Murthy said.

Final call

On the issue of contesting his termination, Murthy said he will talk to advisers and lawyers before taking a final call. “They believe that I should have informed them earlier. It’s a question of timing. I informed the chairman a couple of weeks back,” he said.

However, a source said a disclosure by Murthy, if any, was not done in a transparent manner, inviting the action.

Murthy claimed that the investigation was conducted after he informed iGATE about the relationship and before Roiz wrote to the company board. Murthy vowed to “vigorously” fight any charges of harassment if Roiz decided to take legal action. He admitted to having a relationship with her but called the harassment charges “completely false.”

“If she (Roiz) does go to court of law, I will obviously contest it. My course of action will be reactive. The intent will be to contest it vigorously if there is a lawsuit filed,” Murthy said. “If you are interested in money, there are ways to get it. There are enough people who are trying to benefit from it… I know it has to be absolutely false and fabricated.”

He said the same lawyer who had represented Reka Maximovitch, an Infosys employee who accused him of sexually harassing her in 2002, was handling Roiz’s case as well. Murthy had paid $3.9 million to Maximovitch to settle the case.

“Without question, it is a case of extortion… if the company deems it fit that they should settle it using insurance that is the company's prerogative,” Murthy said, adding that the present case had no parallel with the 2002 incident.

Sunil Wadhwani, co-founder and co-chairman of the iGate board, said on Tuesday the company board had deliberated extensively on the matter before terminating Murthy’s services.

Violation of policy

“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,” he said.

Industry veteran Gerhard Watzinger was appointed the interim president and CEO.
Nasscom chairman Krishnakumar Natarajan on Tuesday said the iGate board has taken the right decision by sacking Murthy.

“A right decision has been taken. I think the decision reflects what IT industry standards for. It stands for the highest standards of governance and integrity,” Natarajan said.

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