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Progeon incurs loss in Q2; new CEO soon

Fakir Chand in Bangalore

Progeon Ltd, a subsidiary of the Bangalore-based global IT company, Infosys, set up early this year to foray into the booming business process management, will soon have a new chief executive officer.

Announcing this on the occasion of Infosys' second quarterly results for the fiscal 2002-03 in Bangalore on Thursday, Progeon part-time chairman and board director T V Mohandas Pai said the company had already shortlisted a candidate for the post of CEO, and an announcement would soon be made.

It may be recalled that Progeon's first chairman and CEO Phaneesh Murthy, who was also heading Infosys' worldwide sales and marketing division, had to resign from the post in July in the wake of a lawsuit filed against him by his former executive assistant Reka Maxmovitch for sexual harassment and wrongful termination of her services from the company.

As an interim arrangement, Pai was made its part-time chairman till a full-fledged technocrat succeeded. Incidentally, Pai is the chief financial officer of Infosys and a director on its board.

Meanwhile, Progeon reported a revenue of Rs 2 crore (Rs 20 million) for the second quarter (July-September, 2002), but incurred a loss of Rs 1.28 crore (Rs 12.8 million).

Pai also disclosed that the company had acquired two more clients during the quarter under review, taking its total to three till date. It has about 300 employees on its rolls.

Pai told rediff.com that the company would turn around by the end of the current fiscal year as it had already posted a small net profit during the period. He did not, however, mention the net profit in figures.

"The net loss is on account of capital investments and hiring of staff to meet its requirements. Realisation of projected revenues from its business will generate enough income to post net profits by the year end," Pai claimed.

Infosys' CEO Nandan M Nilekani declared that the resignation of Murthy did not have any material impact on the business and growth of the nascent Progeon.

Incidentally, Progeon has co-opted Indian Institute of Management (Ahmedabad) professor J R Verma as an additional director on its board early this week.

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