MUMBAI: In an ironic twist to the dispute among the founders of Mumbai-based Fractal Analytics, the outgoing co-founders now want to buy out the stakes held by existing promoters. RK Reddy and Pradeep Suryanarayan, who quit the company in June and got offers for their stakes from their former partners, say they will remain shareholders and in fact, want to bring about changes to its management.
Last week, the Bombay High Court declined a stay on the duo’s freedom to pursue careers with Fractal’s competitors. Speaking on behalf of the two former co-founders, Mr Reddy told ET they want to rope in a private investor and make an offer to their three former partners as well as angel investor Gulu Mirchandani of MIRC Electronics. “The company has not been running as per our expectations and now after the high court verdict we would be looking to set the house in order,” Reddy said.
Srikanth Velamakanni, the company’s CEO, and co-founders Pranay Agarwal and Nirmal Palaparthi had begun legal proceedings against Mr Reddy and Mr Suryanarayan on charges of breaching non-compete agreements with the company. They had also offered to buy the stakes of Mr Reddy and Mr Suryanarayan in Fractal Analytics.
With the court order leaving their professional relationship with Mumbai-based outsourcing company Adventity untouched for now, Mr Reddy said both of them would nevertheless retain their shareholding in Fractal. Among the options they are evaluating is to bring in new members on the company’s board of directors using the rights they have as shareholders of the company.
When contacted, Mr Velamakanni declined to comment on the issue. He also did not answer queries on whether some more employees have left the company. Meanwhile, Mr Mirchandani was unreachable despite repeated attempts by ET to contact him. Mr Reddy and Mr Suryanarayan had moved out of Fractal a while back and had begun to offer consultancy services to Adventity. Currently, nearly 50% of the company is owned by individual investors of which Mr Mirchandani is the largest investor; another 40% rests with the five founding partners while the remaining 10% is with the employees of the company.
Fractal Analytics was started by five IIM-A graduates to tap opportunities in the area of business analytics and not many had thought that the company would go in for a split within six years from inception. The company has some of the biggest banks in India and Asia as clients, including ICICI Bank, HDFC Bank, UTI Bank, Korean Exchange Bank, USJ in Japan and OCBC in Singapore.