Phaneesh Murthy drags iGate to court

Says company 'improperly' terminated him

Phaneesh Murthy, the former CEO of iGate has filed a lawsuit against the Nasdaq-listed IT services company in a California court alleging that the company ‘improperly’ used the reporting policy to terminate him despite being aware of his personal relationship with the subordinate employee.

In the lawsuit which has been filed at the superior Court of Alameda County in California, Murthy has alleged in the lawsuit the company ‘singled him out’ despite many other such relationships that prevailed within iGate then, and has withheld his vested stocks (worth around $17 million) and various other benefits.

iGate, however, has said that the claims does not have any merit and it would defend those ‘vigorously’.

“We believe that this claim has no merit, and we intend to vigorously defend this action,” a company spokesperson replied to an email query.

Murthy was sacked by the US-based IT services firm in May this year for failing to disclose his relationship with a subordinate employee who was then working as the Head of investor relations.

“I have a letter from one of the independent directors of the Board of iGate saying he knew of my relationship with the employee since January 2012," he said. Murthy said even though he had the proof of a signed letter from the director which said that the Board knew about the relationship, he is taking the legal route as the last recourse.

Murthy said even after six months of his termination from the iGate, the company has not yet given the vested stocks and various other benefits which he was entitled to get. "The reality is in many ways you have been in the part of the creation, turnaround and building of the employees. I have lot of respect for them. I have reached out to the company’s directors quite often …but that have not come through for the last six months,” he said.

“According  to the employee contract, I am eligible for the vested stock, which is 527,000. The worth of my vested stock is about $17 million and it is my life saving. I did not sell the stocks as the board requested me not to sell saying it would send a negative signal,” he added.

Murthy said he is also claiming other termination benefits and his lawsuit is for vested stock termination benefits and damages from iGate.

“Employment contracts are sacrosanct. I have put in lot of hard work and created value for the firm and still if they do not to honour the contract, it is not a good thing. This will not stand in the US court,” he said.