The Telegraph
Since 1st March, 1999
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Phaneesh settlement not linked to Infy ADR

Bangalore, May 12: Infosys Technologies today denied charges by former director Phaneesh Murthy that the out-of-court settlement with Reka Maximovitch on a sexual harassment lawsuit was connected with its second American depository receipts issue.

Terming Phaneesh’s allegations as blatantly “false”, Infosys said he had voluntarily signed the settlement and agreed to every condition that the company had set.

“As has been stated, Infosys settled this matter because it believed it was in the best interest of the company to do so. The company has disclosed in all its SEC filings as early as October 2002 that the case with Reka may materially impact the earnings of the company. As the company had already disclosed the risk in its filings there is no connection between the settlement and the proposed ADR offering,” Infosys corporate counsel and head-legal, R. Nithyanandam said.

Infosys announced yesterday that it had reached a $ 3-million settlement with former employee Reka Maximovitch on a sexual harassment case filed against the company and Phaneesh.

“This case was settled on April 25 as the depositions were to start the same day. A reading of the many public filings in this case would bring forth the grave nature of the allegations made against Phaneesh,” he said.

On claims by Phaneesh that he was not a party to the settlement, Infosys said it had made it clear that it was willing to settle with Maximovitch without involving him.

It said that for Phaneesh to involve in the settlement, Infosys had retained right to sue him for all his actions and lack of contribution; he cannot take recourse to the insurance company if Infosys sues him and the company not be bound by any term of confidentiality with respect to settlement of this case.

“Initially Phaneesh refused to participate in the settlement on these terms. When Infosys confirmed to him that it was going ahead with the settlement alone, he came voluntarily and signed the settlement and agreed to every condition that Infosys had set,” Nithyanandam said.

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