Nasdaq-listed software services firm iGate on Tuesday said it has sacked its CEO Phaneesh Murthy for his failure to disclose a personal relationship.
The matter came to light after a company employee, Araceli Roiz, 31, filed a complaint of sexual harassment against Murthy, 48, with the board. As the board mandates that the top management should disclose any such relationships in writing, Murthy was asked to leave after it was found that he had failed to do so.
US SEC (Securities and Exchange Commission) rules also require the disclosure of material relationships between key board committee members.
Murthy, however, in a conference call with newspersons, claimed that he had already communicated to the board about the nature of his affair with Roiz in the first week of May. He claimed that he had not violated any company policy and the charges were absolutely false and fabricated.
Meanwhile, iGate in a statement said that in its investigation it has found that Murthy’s indiscretion did not violate the company’s harassment policy.
A decade ago, Murthy had to leave another company, Infosys, after an ex-employee, Reka Maximovitch filed a case for sexually harassing her. Infosys later settled the case out of court by giving a compensation of about $2 million to Maximovitch. Commenting on the development, Nasscom chairman Krishnakumar Natarajan said that it was the right decision on the part of iGate and this quick and decisive action augurs well for the IT industry.
Murthy has accepted that he was in a relationship with Roiz but claimed that she was trying to blackmail him. He said a lawyer who had fought for Maximovitch was the same one who was representing Roiz. As the matter stands, Roiz has not claimed for any compensation.
Health insurance
In a filing to the SEC, the board said it has decided on a health insurance package of $6,000 per month for Murthy till he reaches the age of 65. It did not disclose any details regarding severance package.