iGate pays $4.6 mn to ex CEO Phaneesh Murthy to settle defamation case

IT services company iGate has paid $4.6 million to former CEO Phaneesh Murthy to settle the defamation and breach-of-contract case that he had filed.

A Times of India report on Friday said the Nasdaq-listed IT services company fired Murthy from iGate in May 2013 for allegedly not disclosing his relationship with the company’s investor relations head Araceli Roiz. Murthy, after leaving the company, had denied this claim by iGate and filed the defamation suit.

Murthy said “all cases have been dropped and the matter has been resolved.”

iGate CEO Ashok Vemury, in a recent earnings call, disclosed that the company had incurred a one-time charge for legal settlement of $4.6 million. Vemury did not disclose specific details during the call.

 Phaneesh Murthy

In December 2013, Murthy filed a suit against iGate charging it with withholding $500,000 in stocks and various benefits due to him. He also claimed other termination benefits and $6,000 per month that he was expected to get as medical benefit even after he left the company. He disputed iGate’s claims that it was not aware of his relationship with Roiz.

In March last year, iGate filed a counter-complaint against Murthy alleging that the firm had suffered significant damages from the events following Murthy’s failure to disclose his relationship with the subordinate employee, and claimed compensation.

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