After Coalgate, An iGate PHANEESH SACKED

 

Oops! He Did IT Again iGate CEO Phaneesh Murthy has been sacked by its board for not reporting a sexual relationship with 31-year-old investor relations manager Araceli Roiz. Back in 2002, he was unceremoniously shown the door at Infosys on charges of sexual harassment. In a concall with journalists, he claimed it's a case of extortion and when asked why Roiz hurled charges at him, he said: "When you figure out women, let me know and I will take the lesson from you."

OUR BUREAU BANGALORE

   One of the technology industry's bestknown personalities was hoist by his own petard after yet another sexual indiscretion cost him the job of president and chief executive officer of iGate.
Phaneesh Murthy, 49, who transformed a loss-making firm into a billion-dollar company, was sacked on Monday for not reporting a sexual relationship with an employee to the board of directors. The ignominy is a close rerun of a 2002 incident when he was booted out of Infosys, a company where he helped revenues grow 350-fold within eight years. Murthy's abrupt departure means his career has almost been dealt a mortal blow. For iGate, on which he has left his singular imprint, finding a chief executive officer capable of achieving the lofty ambitions being chased by Murthy will be a tall order. "I think this will have a negative impact on the company's growth. The CEO was the face of the company and involved in marketing its services and selling its vision to prospective clients, " said Vincent Colicchio, analyst with US-based brokerage Noble Capital.

Phaneesh Calls it a Case of Extortion


"We expect this to be a setback to the company's brand and stature in the near term," said Colicchio. Shares of iGate, which is based in Fremont, California, and listed on Nasdaq, were down 9% to $15 in opening trade. Murthy admitted to an affair with investor relations manager Araceli Roiz, but insisted that the charges of sexual harassment were a "case of extortion". He denied similar accusations when they were made by Reka Maximovitch, his assistant when he was global head of sales at Infosys. Eventually, the company settled the case by paying $3 million. Murthy forked out a further $800,000 in 2004 to settle another claim by a separate employee of Infosys.
"I feel very sad. Phaneesh is such an extraordinary individual, sociable and a true alpha male," said TV Mohandas Pai, a former director of human resources and finance at Infosys. iGate said in a statement that the independent investigation ordered by iGate's board did not find merit in the harassment charges levelled against Murthy. It also said the company has appointed Gerhard Watzinger as interim president and CEO. A search committee will find a new CEO for the company, which is aiming for sales of $3 billion by 2017. "We recognise the significant contributions Murthy has provided over the past 10 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," the statement quoted co-founder and co-chairman Sunil Wadhwani as saying.
Attempting to allay concerns about the impact of the loss of its high-profile CEO, iGate's new head Watzinger said the company has "great resources and a deep bench of talent". "We have a clear strategy that has put us in this strong position to maintain our successes into the future. Continuing to execute this strategy is our top priority." Murthy, who steered the acquisition of larger peer Patni Computer, was in the middle of implementing an 'outcome-based' model that challenged the traditional pricing system in the technology services industry. He also piloted an aggressive marketing campaign that took potshots at Indian outsourcers' mainstay time and materials billing model as the "No.1 enemy of mega corporations".
iGate said the decision to
   terminate
Murthy was made after he failed to report his relationship to his superiors, a violation of the company policy and terms of his employment agreement. Murthy, however, said he had informed the company's chairman about his personal relationship after it ended "a few weeks ago". He claimed he was not given an opportunity to explain his side of the story to the board. "A right decision has been taken. I think the decision reflects what the IT industry stands for. It stands for the highest standards of governance and integrity. It is a very isolated incident and has no bearing in terms of what implications it has on the Indian IT industry," said Nasscom Chairman Krishnakumar Natarajan. Murthy said his immediate future will be decided by whether Roiz decides to take the case to court, in which case he could be faced with a costly legal battle. "I have made my mistakes and there are some who have benefited," he said.