US-based outsourcing firm iGate Corp today sacked the company's Chief Executive (CEO) Phaneesh Murthy, one of India's best-known IT leaders, for not disclosing a relationship with a subordinate.
Murthy, who was replaced with immediate effect by interim CEO Gerhard Watzinger, denied charges of sexual harassment but admitted of being in relationship with a colleague for "few months." Its a case of extortion, he claimed.
In 2004, Murthy was forced to quit India's second biggest software exporter Infosys Ltd following a sexual harassment lawsuit, which was settled out of court.
iGate, which in its annual report stated that the exit of CEO would impact business, in a statement today said its board engaged outside legal counsel to investigate and found Murthy's failure to disclose relationship with a subordinate.
The probe, which is continuing, has not found any violation of the company's harassment policy, the Fremont, California-based company said.
Murthy, who holds over 6.55 lakh shares in iGate, in a conference call named the woman with whom he said he had a relationship "over the last few months" but claimed he had informed the firm about it and there was no violation of any policy.
"I do believe the charges (of sexual harassment) are incorrect and pursuant to the relationship I had with her over the past few months. I do not believe, I have violated any company policy... I had spoken to the Chairman (iGate) about it," he said. "It was not sexual harassment, it was a few months of relationship."
iGate said the investigation has reached the finding that Murthy's failure to report this relationship violated the company's policy, as well as Murthy's employment contract.
"The board deliberated extensively on this matter," iGate co-founder and co-chairman Sunil Wadhwani said.
"We recognise the significant contributions Murthy has provided over the past ten years in helping to establish iGate as a leader in the IT industry... However, as a result of this violation of iGate policy, we asked Murthy to step down."
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"Everything is a regret," Murthy said of the iGate situation. "The entire ordeal is a regret."
US-based iGate in a statement said: "The Board's decision was made as a result of an investigation