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Phaneesh Murthy violated company's policy: iGate

Last updated on: May 22, 2013 09:29 IST

Image: Phaneesh Murthy.
Photographs: Denis Balibouse/Reuters Bibhu Ranjan Mishra in Bengaluru

After his termination as president and chief executive of iGate, Phaneesh Murthy, in a conference call with reporters, claimed he had informed the company about his relationship with a subordinate employee, and, therefore, it wasn't a violation of the company's policy.

In an emailed exchange with Business Standard, iGate states the circumstances that led to Murthy's sacking.

Click Next to read the edited excerpts:

Phaneesh Murthy violated company's policy: iGate

Image: iGate Bengaluru.
Photographs: Reuters

Murthy has said he informed the company about his relationship with the subordinate employee, after ending the relationship.

The board's decision followed an investigation of the facts and circumstances surrounding the relationship Murthy had with a subordinate employee, as well as a claim of sexual harassment.

The investigation was conducted by a legal counsel engaged by the board.

Murthy's failure to report his relationship with a subordinate violated iGate's policy, as well as his employment contract.

It also resulted in the board losing confidence in him leading the company.

. . .

Phaneesh Murthy violated company's policy: iGate

Image: iGate Bengaluru.
Photographs: Reuters

What does the company's policy state and in what way did Murthy violate the policy?

According to iGate's policy, in case of a romantic or sexual relationship, the person in the position of greater authority must notify her/his supervisor, head of the human resources department or the board of directors of the company so that the higher authority can ensure alternative supervisory or evaluative arrangements are put in place.

Is the allegation of sexual harassment against Murthy true?

Our internal investigations have not uncovered evidence of harassment, but the investigation is underway, as the company has recently received the description of the complaint of sexual harassment, through the legal counsel of the particular employee.

. . .

Phaneesh Murthy violated company's policy: iGate

Photographs: Vivek Prakash/Reuters

If the employee concerned was sexually harassed by the chief executive for some time, why didn't she report it earlier?

We can only speak on our behalf.

Will the company take any action against her?

It is our policy not to comment on pending or potential litigation.

Before taking Murthy on board, why didn't the iGate management consider the fact that he had been fired by his previous employer for alleged sexual misconduct?

When iGate acquired Quintant, which was owned by Murthy, the company conducted due diligence into the sexual harassment claims against him.

Subsequently, an investigation was conducted by one of our major shareholders.

In both cases, the previous charges were found to be unsubstantiated.

. . .

Phaneesh Murthy violated company's policy: iGate

Image: Phaneesh Murthy.
Photographs: Sreeram Selvaraj

Would this disclosure and the follow-up action against Murthy affect the company's reputation and business continuity?

We do not expect this announcement to have any material impact on iGate's financial or operational performance, both of which are strong.

What is the severance package iGate is offering Murthy for terminating his employment contract without prior notice?

Murthy is terminated for cause, for violation of iGate's policy.

. . .

Phaneesh Murthy violated company's policy: iGate

Image: iGate office at Bengaluru.
Photographs: Reuters

What checks have you put in place to ensure the business functions as usual?

A search committee, within the board of directors, has been formed.

This would oversee the process of identifying and selecting the right person for the job.

To accelerate their efforts, the committee has hired leading executive search firm Russell Reynolds to assist scouting for a long-term president and chief executive.

Source: source