The Tribune, Chandigarh, India

iGate sacks CEO Phaneesh Murthy over sexual misconduct
Was forced to quit Infosys in 2012 in similar circumstances
TNS & Agencies

Bangalore/Mumbai, May 21
IT outsourcing major iGate Corp, the majority of whose operations are in India and most of its 30,000 employees based in Bangalore, said it had sacked its chief executive, Phaneesh Murthy, for not disclosing a relationship with a subordinate after investigating one of the industry's best-known executives for sexual harassment.

While the female employee had filed a sexual harassment complaint against Murthy, the investigation by outside legal counsel appointed by Gate could not substantiate this charge.

Murthy had led several initiatives to improve the performance of the Fremont, California-based company, including charging clients for business results instead of man hours, the billing method more commonly used by IT outsourcing firms.

He was forced to quit India's second biggest software services exporter Infosys Ltd in 2002 following a sexual harassment lawsuit, which was settled out of court.

Speaking to reporters on Tuesday after iGate announced his departure, Murthy said he had informed the company chairman about his relationship with the female employee a few weeks ago.

iGate said its investigation showed Murthy had violated the company policy by failing to report his relationship with the employee. Murthy did not violate iGate's harassment policy, it said in a statement.

"The board's decision was made as a result of an investigation by outside legal counsel, engaged by the board, of the facts and circumstances surrounding a relationship Mr Murthy had with a subordinate employee and a claim of sexual harassment," iGate said in a statement dated May 20.

A company spokesman did not respond to requests for further information. Murthy was replaced with immediate effect by interim CEO Gerhard Watzinger, the statement said.

iGate and other smaller IT outsourcing services providers compete with Indian heavyweights such as TCS, Wipro and Infosys on price to win market share.

In recent months, the firm had issued advertisements in international media mocking the IT outsourcing sector's traditional billing model.

Murthy's billing strategy is meant to appeal to clients with less-certain budgets in a tough economy.

Frederic Giron, principal analyst at Forrester Research, said Murthy's departure did not necessarily mean the company would abandon the changes he had spearheaded.

"While it is still unclear if initiatives ... will survive under a new leadership, I would assume so, since the transformation has been underway for about 2 years," he said.

Murthy was a rising star at Infosys and was seen by many as on track to be the company's first non-founder chief executive before the sexual harassment lawsuit abruptly ended his tenure.

After leaving Infosys, Murthy founded a company that was bought by iGate. In 2011, he teamed up with buyout firm Apax Partners to conduct iGate's $1.2 billion purchase of much-bigger Indian rival Patni Computer Systems.

IT dept sending letters to high spenders to pay tax
Tribune News Service

New Delhi, May 21
As part of the exercise to tighten tax compliance, the finance ministry said Tuesday it would send letters to 70,000 “high priority” assessees this month asking them to disclose their true income and pay taxes.

A statement said 70,000 letters are being sent in two batches to other high priority cases in this month. Of these, the first batch of 35,000 letters was dispatched on Monday. The ministry has undertaken an exercise to identify PAN card holders who had engaged in high value transactions but were not paying full taxes.

Based on the data analysis, the income tax department has identified 1,219,000 people who have not filed their tax returns. Of these, the department has identified high-profile cases for followup and monitoring.

This exercise is now being expanded and a compliance management cell has been set up to ensure followup action and track return filing and tax payment of the target segment. The 70,000 letters being sent are part of this effort. The crackdown on tax defaulters was launched last fiscal under which the revenue department had sent 105,000 letters to assessees seeking to know whether the person had filed his tax return or not.

FIIs to pay only 5% withholding tax on interest

In a bid to incentivize foreign investment in the debt market, the government today said foreign institutional investors will have to pay only 5% withholding tax on interest earned from such investments till May 2015. In order to provide broad based incentive and encourage greater offshore investment in debt market by FIIs and qualified foreign investors (QFIs), it has been decided that the benefit of lower withholding tax at 5% instead of 20% shall be available in respect of interest on investments in bonds issued by Indian firms and government securities,” the finance ministry said Tuesday. It added the reduction in rates and simplification of the withholding tax norms is expected to deepen the Indian debt market and accelerate the pace of growth of the Indian economy. The benefit will be available on interest income of FIIs and QFIs accruing between June 2013 and May 2015 irrespective of the date of investment, the ministry added.

Vodafone FY13 net dives 90%, to reinvest £2.1bn Verizon dividend

London, May 21
British mobile phone giant Vodafone, the world's second largest mobile operator, said Tuesday annual net profits tumbled 90 per cent after taking a vast impairment charge relating to its businesses in debt-laden eurozone nations Italy and Spain.

Meanwhile, Vodafone will reinvest a US $3.2 billion dividend from its healthy US arm to counter weakness in southern Europe that contributed to the largest ever quarterly fall in the group's main revenue measure. The company is trying to decide whether to sell Verizon Wireless, its profitable US unit in what could be the world's third largest deal to support its struggling core operations.

Majority owner Verizon Communications wants to buy Vodafone's 45% stake but chief executive Vittorio Colao once again refused to discuss the possibility, saying that he had nothing new to add.

But Vodafone posted a 4.2% quarterly fall in organic service revenue, in line with forecasts, but worse than the 2.6% it recorded in the third quarter and the largest quarterly drop since the company started using the measurement in 2003. — Reuters/AFP

IPO unlikely this year: Vodafone India

A planned initial public offering of Vodafone India, the country's second largest mobile operator, is unlikely this year, the unit's CEO Marten Pieters said in New Delhi on Tuesday. Pieters said the company will wait for clarity on rules around airwaves and cellular permits before going ahead with the IPO. Vodafone India said its service revenue rose 10.6% in FY13 to Rs 356,101 million from Rs 321,844 m in the FY12 contributing 10.6% to the revenue of the UK-based Vodafone Group. CFO Colman Deegan said the rise in service revenue was driven by strong growth in mobile voice minutes and data revenue, partially offset by the impact of regulatory changes. Average customer growth slowed in Q4, as Q3 regulatory changes affecting subscriber verification continued to impact gross additions. EBITDA rose 24%, with a 3.3% point increase in EBITDA margin, he added. — TNS/Reuters

Punjab’s only local area bank set to expand
Jangveer Singh/TNS

Chandigarh, May 21
The local area banking (LAB) concept has not only taken root in Punjab but is also set to expand further with the RBI according approval to Capital Local Area Bank, which is running successfully in Jalandhar, Kapurthala and Hoshiarpur districts, to two more districts — Ludhiana and Amritsar.

There are only four LABs in the country and Capital LAB, headed by Sarvjit Singh Samra, is the only one that has been functioning in Punjab for nearly 13 years now. The concept behind establishing LABs in 2000 was to cater to the needs of local people by providing efficient and competitive financial intermediation services in their area of operation.

Capital LAB MD Sarvjit Samra said the bank, which started with three branches in 2000, currently operates 29 branches in Jalandhar, Kapurthala and Hoshiarpur, recording business (deposits plus advances) of Rs 1,650 crore in the last fiscal year.

Capital LAB has many firsts to its credit. It is one of the unique banks which has zero per cent NPAs despite the fact that it is giving as many as 30% of its total loans to the agriculture sector besides loans to small retailers. He said another unique feature of Capital was that at least 25% of its accounts were “no frills” accounts which had been opened with initial deposits of Rs 100 in case of rural areas and Rs 300 in case of urban areas. He said Capital was open seven days a week.

Samra said this success had been made possible by involving the local community. He said all 500 employees of Capital were sourced from within three to four kilometres of their place of residence. He added besides getting a committed workforce, localities were better able to vet loan proposals to ensure loans were given for productive ventures only.

Samra said that Capital, which already had over 200,000 customers, was set to grow to 40 branches by 2015, by which time it expected to do annual business of at least Rs 2,350 crore.

Chinese PM visits TCS global R&D centre
Tribune News Service

Mumbai, May 21
Chinese Premier Li Keqiang on his last leg of his three-day sojourn in India visited the Tata Consultancy Services global development centre in suburban Goregaon here on Tuesday. Tata Group chairman Cyrus P. Mistry hosted Li and his delegation. The visiting leader was given an overview of the group's operations in China.

A presentation was made to Li highlighting investments made in China by TCS and Tata Motors which is manufacturing its Jaguar and Land Rover vehicles in that country. Later the visiting leader interacted with Tata employees in China at the Shanghai Global Development Centre through live video-conferencing.

In his statement Mistry said China was a very important geography for the growth of the Tata Group. "We have made substantial investments in many sectors across China. We believe that there can be tremendous cross-learning between India and China in the field of technology," Mistry said.

TCS, which was the first IT company from India to set up business in China, today operates out of six locations there: Beijing, Hangzhou, Shanghai, Shenzhen, Tianjin and Dalian. TCS is using its base in China to provide services in nine different languages — English, Mandarin, Cantonese, Japanese, Korean, Thai, Indonesian and Vietnamese. The company has also found a ready market for its BaNCS core banking system which has been adopted by 14 banks in that country, a statement said.