Indian outsourcer iGate sacks CEO amid sexual harassment claims

CEO Phaneesh Murthy has been fired for not disclosing a relationship with his subordinate. But iGate has not blamed him for sexual harassment, a similar charge he faced at former employer Infosys over a decade ago.

Indian outsourcing firm iGate has fired CEO and President Phaneesh Murthy amid a relationship with an employee and a claim of sexual harrassment.

"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," said iGate in a statement released on May 20.

phaneesh murthy
Phaneesh Murthy, former CEO and President of iGate.

Murthy violated company policy, and his own contract, by not declaring a relationship with an employee, the company said. However, the on-going investigation has not uncovered any violation of iGate's harassment policy, it added.

Sunil Wadhwani, co-founder and co-chairman of the iGate board, said: "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."
Murthy was also accused of sexual harassment at his former employer Infosys. In May 2003, Infosys reportedly paid out US$3 million to Murthy's personal secretary Reka Maximovitch, who accused her boss of sexual harassment. 

He has been immediately replaced by Gerhard Watzinger on an interim basis, while a search committee finds a permanent replacement. iGate described Watzinger, as a successful 29-year IT industry veteran, who previously served as an executive at iGate from 1998 to 2003 in a number of roles, including CEO of the iGate Solutions business.
iGate was most recently in the news last month for a controversial outsourcing deal with Canada's biggest bank for its foreign worker hiring practice, which reportedly would see some 50 jobs move from Toronto to Bangalore.