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Phaneesh Murthy saga: Why do smart people do stupid things?

Corporate May 24, 2013

Araceli Roiz was not hired by me, I met her before she joined: Phaneesh Murthy

By Mitu Jayashankar and NS Ramnath

Outsourcing company iGate Corporation on Tuesday sacked its chief executive officer and one of India's best-known IT executives Phaneesh Murthy for not disclosing to the company his relationship with a subordinate employee, after probing a sexual harassment complaint against him.

The firm's investor relations headAraceli Roiz is reportedly pregnantwith Murthy's child and plans to sue both Murthy and the company.

ForbesIndia interviewed Murthy a day after he was sacked from iGate. Here are excerpts from the interview:

Q. When did you inform the Chairman about your relationship?

Phaneesh Murthy. Reuters

Phaneesh Murthy. Reuters

A. Relationship ended a few months ago, I informed the Chairman a few weeks ago, letter was received by the company a few days ago and I was informed yesterday. It was on for a few months. I won't get into any specifics because it is very likely that this will end up in court.

Q. Was she reporting to you?

A. No

Q. Was she hired by you?

A. No

Q. Did you interview her?

A. She was interviewed by the CFO, I met her before she joined for the final interview.

Q. How long she was in the company?

A. Close to three years

Q. What prompted you to talk to the Chairman (about your relationship)?

A. There were a variety of reasons. There were a combination of factors,

Q. What was their reaction like when you informed them?

A. They suggested we appoint an investigator and do an external investigation.

Q. Were you asked to go on leave at that time?

A. I was not in California, I was traveling in Europe at that time.

Q. Did you hear anything in between?

A. I spoke to the investigators, they also spoke to a few other people. And the sense that seemed to be was that there was no evidence of sexual harassment.

Q. So all this while, you continued working, until last evening?

A. That's right.

Q. What is your read of this whole thing?

A. They say that I have violated the company employee handbook. Which basically says that any relationship between two employees in a company should be reported.

Q. We have talked to many people today and when there is a senior-junior relationship in a company it should be reported. Isn't it mandatory? Shouldn't you have done it?

A. I didn't know about the handbook, I didn't know about the rule. If I had known about it, I should have done it. If you look through your own employee handbook, there will be lots of rules you won't know about.

Q. Perhaps, yes.....

A. There are thousands of rules (pauses) had I known, that's a different issue......

Q. Given your position and what happened at Infosys, somebody like you should have been paying more attention to the rulebook. How could you miss something like this? Weren't you supposed to be more vigilant?

A. Yeah, you are right, no question about it. I should have been, but I wasn't.

Q. What did you think would be the outcome when you told the Chairman?

A. Given how corporations think, I expected this to be the outcome.

Q. So you saw this (termination of services) coming?

A. I have been through this, so to that extent, I know what was coming next.

Q. Do you have a lawyer or a legal counsel?

A. Not yet, I was working till yesterday. I will contact my lawyer today.

Q. What happens to the company after this? You were leading the merger with Patni. Have you spoken to the Board about that?

A. They have not asked me for any advice. They have gone ahead and appointed a person. I am assuming they are on top of it.

Q. How did you hear about the termination?

A. The two Chairmen came to my office and informed me. They told me I have to leave today. Once they had appointed a new CEO what am I trying to protect?

Q. What about conversations with your family? Have you had time to do that? Have you prepared them?

A. I did, but I don't want to talk too much about it.

Q. What are the next steps for you?

A. I don't know. I have to think, perhaps correct as many mistakes as I can. I don't know. This all happened quite suddenly.

Q. What about your shares in iGate?

A. I have vested shares and some outstanding.

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