Phaneesh Murthy removed from iGATE board

08 Jun 2013


Phaneesh Murthy, who was sacked as chief executive of iGATE Corp a little over two weeks ago following revelations of sexual misconduct, has now been removed from the company's board as well, with effect from Friday.

A majority of shareholders removed Murthy, by written consent in lieu of a meeting, from the iGATE Corp board for 'cause'.

Murthy was sacked as chief executive by the IT outsourcing company over an undisclosed relationship with a subordinate (See: iGate sacks CEO Phaneesh Murthy over sex harassment charges) 

Murthy had led several initiatives to improve the performance of the Fremont, California-based company, including charging clients for business results instead of man hours, the usual billing method used by IT outsourcing firms.

But this is not the first time that his sexual penchants have let down the otherwise successful IT executive. He was forced to quit India's Infosys Ltd in 2002 following a sexual harassment lawsuit, which was settled out of court.

Murthy was a rising star at Infosys and was seen by many as on track to be the company's first non-founder chief executive before the lawsuit abruptly ended his tenure.

After leaving Infosys, Murthy founded a company that was bought by iGate. In 2011, he teamed up with buyout firm Apax Partners to conduct iGate's $1.2 billion purchase of much-bigger Indian rival Patni Computer Systems.

Speaking to reporters after iGate announced his departure, Murthy said he had informed the company chairman about his relationship with a female employee a few weeks earlier.

iGate said its investigation showed Murthy had violated the company policy by failing to report his relationship with the employee. He did not violate iGate's harassment policy, it said in a statement.

iGate and other smaller IT outsourcing services providers compete with Indian heavyweights such as Tata Consultancy Services, Wipro and Infosys on price to win market share.

 In recent months, the company had issued advertisements in international media mocking the IT outsourcing sector's traditional billing model.

Murthy's billing strategy is meant to appeal to clients with less-certain budgets in a tough economy.

iGate shares, and revenues, have more than quadrupled since Murthy joined the company in mid-2003, according to Reuters data.

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