Bangalore: Did Infosys Technologies mislead the authorities and investors by keeping under wraps the case filed by Reka Maximovitch against Phaneesh Murthy, the former director and head of sales, marketing, communications and product services of Infosys, for sexual harassment and 'stalking'?

Before probing the issue let's look at the ground realities. American courts award millions of dollars as compensation to the aggrieved person if a sexual harassment charge is found valid.

Murthy, the highest-paid employee of Infosys (he used to take home a cool Rs 1.91 crore every year), abruptly resigned from Infosys last week to ''devote time and attention to pursue a successful defence of the suit.''

Infosys, in its filings to the US Securities Exchange Commission (SEC) on 8 May 2002, had categorically said the company - or any of its directors, senior executive officers or affiliates - is not party to any material or legal proceedings.

But it now transpires that Maximovitch, Murthy's former executive assistant, had filed a case against Murthy and Infosys as early as 17 December 2001. Earlier that year she obtained two restraining orders - one in January and the other in June - from a US court against Murthy.

An India Today report says Maximovitch was fired from her job in December 2000. And between October 1999 and December 2000 she was pressurised by Murthy to have a sexual relationship with him. Maximovitch further alleges that Murthy ''stalked'' her by tracing her new employer and offering to buy out the company on behalf of Infosys.

Even as Infosys officials are wondering as to why Maximovitch didn't use the internal grievance redressal machinery while in service, one wonders whether the company ever had any policy on sexual harassment in the workplace. If one goes by its latest annual report, the company seems to have formulated such a policy only during 2001-02.

Viewed in the context of the sexual harassment suit filed against Murthy and Infosys, it appears that the company drafted the policy after the issue snowballed.

Further, given the No 3 position occupied by Murthy in the Infosys hierarchy and heading a market from where the company gets the lion's share of its business, only the naïve would expect the internal grievance redressal system to proceed objectively, says an industry observer.

The views expressed by Infosys chairman N R Narayanamurthy appear to be to his namesake. Whether Infosys conducted any internal enquiry before Murthy submitted his resignation is still a mystery.

Infosys managing director Nandan Nilekani (see interview below) says the company will not underwrite Murthy's legal expenses in connection with this suit. This when Infosys has a policy, as part of its employment package, whereby it compensates its directors and officers for claims brought against them under US laws.

The employment agreement provides for the indemnification of Infosys directors and officers for certain expenses, judgements, fines and settlement amounts incurred by them in any action or proceeding, including any action by or in the right of Infosys arising out of such person's services as a director or officer.

No-comments Nilekani

Venkatachari Jagannathan talks to Nandan Nilekani

Will Infosys Technologies, by itself or through its groups, associates or affiliates, offer financial help to Phaneesh Murthy to fight the sexual harassment case filed against him by Reka Maximovitch?
Infosys will not directly or indirectly provide any financial assistance to Murthy to defend his case.

Does your company have a policy to financially support the employees to fight legal cases filed against them?
No.

It is learnt that Maximovitch had filed the case on 17 December 2001. And between January and June 2001 she had taken two restraining orders against Murthy. Was Infosys Technologies aware about these legal suits?
Since the matter is before the courts we cannot comment on this.

When exactly did Infosys Technologies formulate its policy on sexual harassment? Was it before Maximovitch filed her case, or after that?
Infosys has a clearly documented policy against sexual harassment. Since the matter is before the court we cannot comment on this.

Did Infosys Technologies conduct an internal enquiry before Murthy resigned? If yes, what was the finding of the enquiry report?
We have no comment to make on Phaneesh's resignation other than that stated in our press release. [It reads: 'Phaneesh Murthy cited as the reason for his resignation the need for personal time to pursue a successful defense in a recent unlawful termination and sexual harassment lawsuit filed against him and the company.']

Infosys Technologies had declared in its SEC filing dated 8 May 2002 that neither the company nor any of its directors, senior executive officers or affiliates is party to any legal proceedings. Now it transpires that Maximovitch had filed her case before this date. Why did Infosys Technologies mislead the public and the investors?
The company holds the position that there are no material legal proceedings pending against the company and/or its directors and officers. The disclosure in our 20-F was in line with this position.

Does Murthy continue to be with Yantra or other group companies or has he resigned from those positions too?
The company's nominees represent the company in Yantra and Progeon. Phaneesh has resigned from these nominations as well.

What is the compensation demanded by Maximovitch?
The plaintiff has not quantified her claims.

Any other information you would like to add on the issue?
None.