iGate Fires CEO Phaneesh Murthy Over Sex Scandal

Phaneesh Murthy

California-based software services exporter iGate shocked the street on Tuesday when it announced that Phaneesh Murthy, its President and CEO, had been sacked following an investigation over sexual harassment claims.

Murthy was sacked as a result of the investigation surrounding a relationship that he had with a subordinate employee and a claim of sexual harassment. The ongoing investigation has founded that Murthy’s failure to report this relationship violated the company’s policy as well as Murthy’s employment contract.

This is the second time Phaneesh Murthy (49) has been forced to resign on this charge. In 2002, Murthy, then a rising star in Infosys, India’s second-largest IT company, and head of the company’s US sales team, had to quit following accusations of sexual harassment by Reka Maximovitch, his secretary. The company settled out of court for $3 million in 2003.

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

The company has now appointed Gerhard Watzinger as its interim chief executive with immediate effect. Watzinger, who joins from Intel chip maker McAfee, where he was Chief Strategy Officer, had worked with iGate between 1998-2003 as executive in various roles, including the CEO of iGate Solutions business.

A search committee with the board of directors has also been created to oversee the process of identifying and selecting a new President and CEO. Watzinger has ruled himself out of taking the role on a permanent basis, and will only stay until another experienced industry veteran is selected for the job.

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