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Phaneesh lawsuit to impact Infosys profit

Fakir Chand in Bangalore

Software major Infosys said on Thursday that its efforts for a settlement with a former woman employee over a sexual harassment case had failed and the pending lawsuit would adversely impact its financial results and operational performance.

This was disclosed by company CEO Nandan Nilekani while announcing the second quarter results for the fiscal 2002-03 in Bangalore on Thursday.

Reka Maxmovitch, a US citizen, working as executive assistant to Phaneesh Murthy, who was chief of sales and marketing of Infosys, has filed a suit in a US court against him and the company for alleged sexual harassment after she was removed from her job. Murthy also quit to fight the lawsuit.

In a statement on the sensational case the company said: "The trial date has not been set. As there is no possibility of a settlement in the near term, the lawsuit will now be decided by trial. Infosys, however, will vigorously defend the matter.

"However, the results of such a lawsuit are difficult to predict."

Asked if any provisioning had been made to pay the plaintiff after the trial, board member and chief financial officer T V Mohandas Pai said the company was yet to make an assessment of the impact.

"As the case is sub-judice, and as per the US laws, the company is not permitted to disclose its modus operandi, " Pai added.

As a fallout of the lawsuit, and to prevent any such incident ever taking place in future, the company had taken several steps like extensive training and crash courses, including counseling in India and abroad.

The company has also ruled out the return of Murthy who is learnt to be in California presently.

Apart from being on the company's board as one of its youngest directors, Murthy (38) was also chairman of Progeon Ltd, a Infosys' subsidiary, set up early this year to foray into business process management.

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