Mumbai, May 21: Phaneesh Murthy, the president and chief executive officer of Fremont, California-based iGATE Corp, has been tripped up once again by a sexual harassment suit — the second time in just over a decade when his career has flamed out over a sex-tinged scandal.

On Tuesday, iGATE Corp stunned the tech world when it announced that Murthy had been sacked after an investigation into sexual harassment claims brought against him by Araceli Roiz, the company’s head of investor relations.

“The board’s decision was made as a result of an investigation by outside legal counsel…of the facts and circumstances surrounding a relationship Murthy had with a subordinate employee and a claim of sexual harassment. The investigation, which is ongoing, has reached the finding that Murthy’s failure to report this relationship violated iGATE’s policy, as well as Murthy’s employment contract,” the company said in a press release.

iGATE co-founder and chairman Sunil Wadhwani said the board had “deliberated extensively” over the charges before deciding to terminate Murthy’s services.

He, however, acknowledged that Murthy had made significant contributions over the past 10 years to propel iGATE into the big league after the acquisition of Patni Computer Services two years ago. Patni is the company where N.R. Narayana Murthy and the seven other founders of Infosys worked before they decided to form their own software exporting company.

The company said Murthy had violated iGATE’s policy by failing to report his relationship with the employee but added that he had not transgressed its harassment policy.

iGATE Corp, which reported revenues of $1.07 billion in 2012, named Gerhard Watzinger as its interim CEO with immediate effect.

Watzinger had previously worked at iGATE from 1998 to 2003 in a number of roles, including CEO of the iGATE Solutions business. He was the executive vice-president for corporate strategy and mergers and acquisitions of the McAfee business unit of Intel Corporation until he resigned in March last year.

Wadhwani and iGATE co-founder Ashok Trivedi will work closely with Watzinger during his tenure as interim president and CEO to ensure a seamless transition.

The iGATE board of directors has formed a search committee to select a new president and CEO. Watzinger has taken himself out of consideration, but he will serve until the selection process is complete.

In a conference call later in the day, Phaneesh Murthy confirmed that he had been in a consensual relationship with Roiz over the past few months but it had ended recently.

He said he had informed the company about the relationship after it was over, triggering the investigation that he claimed was launched before Roiz wrote a letter to the company in which she levelled accusations against Murthy.

Back in December 2001, Murthy was embroiled in a sexual harassment suit when he headed Infosys’ global operations. Reka Maximovitch, a former Infosys employee, had filed a complaint in the Alameda Superior County Court in Oakland alleging verbal sexual harassment, unwanted sexual advances and unlawful termination of employment against Phaneesh Murthy.

Phaneesh Murthy quit Infosys in June 2002 to defend himself against the charges but bowed to pressure and agreed to an out-of-court settlement under which Infosys paid $3 million to Maximovitch. Murthy was able to resurrect his career at iGATE but couldn’t really exorcise the ghost of that suit filed over a decade ago.

In the conference call today, he said that there were no similarities with the previous suit even as he strenuously denied charges of sexual harassment. “It’s a case of extortion… ever since the first case became public, everybody feels that they have an absolutely easy way to collect money on whatever pretext,” Murthy said.

But the intriguing element is that the same lawyer who represented Maximovitch is believed to be representing Roiz as well.

“It is the same lawyer behind both the people,” Murthy said.

Randall B. Aiman-Smith of the Oakland, California law firm McPhee and Aiman-Smith had represented Maximovitch. However, the partnership of McPhee and Aiman-Smith was dissolved in 2005 – two years after the settlement in the Infosys case.

Aiman-Smith and his former executive assistant — Reed W.L. Marcy — at McPhee and Aiman-Smith formed a new partnership in 2006 called Aiman-Smith & Marcy.