Nasdaq-listed iGATEBSE 0.00 % Corporation announced that its board of directors has terminated the employment of president and chief executive officer Phaneesh Murthy as a result of an investigation of the facts and circumstances surrounding a relationship that Murthy had with a subordinate employee and a claim of sexual harassment.
The Board has appointed Gerhard Watzinger as President and CEO on an interim basis.
“The investigation, which is ongoing, has reached the finding that Murthy’s failure to report this relationship violated iGATE’s policy, as well as Murthy’s employment contract,” company said in a statement. “The investigation has not uncovered any violation of iGATE’s harassment policy.”
A former head of sales at India’s second largest software exporter Infosys, this is the second time Murthy is getting entangled in asexual harassment case involving another employee of the same organization. Earlier in 2003, Murthy faced a sexual harassment lawsuit filed by his former executive secretary at Infosys Reka Maximovitch. Maximovitch had complained of sexual harassment and wrongful termination of employment. Infosys, settled the lawsuit out of court for $3 million.
Co-founder and co-chairman Sunil Wadhwani said that the board “deliberated extensively” on the matter
“We recognize the significant contributions Mr. 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 Mr. Murthy to step down,” Wadhwani said.
The other co-founder and co-chairman Ashok Trivedi said that Murthy’s departure was not related in any way to the company’s operational or financial performance.
Gerhard Watzinger, age 52, has previously worked at iGATE from 1998 to 2003 in a number of roles, including CEO of the iGATE Solutions business. Watzinger returns to iGATE from security software-maker now owned by Intel chip-maker McAfee, where he was EVP and Chief Strategy Officer.
Wadhwani and Trivedi will work closely with Watzinger during his tenure as interim president and CEO to ensure a seamless transition.
A Search Committee within the Board of Directors has been created, which will oversee the process for the identification and selection of a new president and CEO. Watzinger has taken himself out of consideration but he will serve until the selection process is complete.
iGate does not expect to make any additional structural or executive leadership changes in the near future.