A class action suit filed against iGate and Phaneesh Murthy in the US has been dismissed and neither the company nor its disgraced former CEO has made any payment in this connection, the IT services firm said today.
Phaneesh Murthy was sacked following an internal investigation, which revealed he had a relationship with a subordinate employee and a claim of sexual harassment in violation of its policies and his employment contract.
The California-based firm was slapped with a class action lawsuit for alleged violations of federal securities laws. The suit alleged that the company failed to disclose that Phaneesh Murthy was involved in an "improper relationship with a subordinate employee" in violation of iGates' stated policies.
It also said "Murthy's improper conduct created a risk that he would be terminated from the company jeopardising the company's future success".
iGate had sacked Phaneesh Murthy on May 20 for allegedly failing to report the relationship with a subordinate employee.
"On August 22, 2013, the class action lawsuit filed against iGate and its former CEO, Phaneesh Murthy by a shareholder of iGate on June 14, 2013 in the US District Court for the Northern District of California, was voluntarily dismissed by the shareholder plaintiff, without prejudice," iGate said in a statement.
The statement further said: "No payment or consideration of any kind was made by any of the defendants in connection with the dismissal."
The suit was filed against the firm and some of its officers and directors to recover damages from the company. The suit alleged violations of the federal securities laws pursuant to Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.
iGate President and CEO Gerhard Watzinger said: "We are pleased to put this matter behind us. With this resolution, we can move forward and continue to focus on delivering the top quality services and solutions iGate customers have come to expect."
The suit was filed by a New York-Based law firm, Pomerantz Grossman Hufford Dahlstrom & Gross LLP, on behalf of