The ruckus at Optimus, Polaris Software Lab's, wholly owned business process outsourcing subsidiary, is, according to independent observers, linked to the non-issuance of sweat equity to the top management.

The troubled relationship between Arun Jain, chairman and CEO, Polaris and his two top recruits, Harpal Duggal and Suren Khirwadkar, has also forced Polaris to obtain injunctions from the Madras High Court, preventing the two from talking to any third party about the company's affairs.

It is now learnt that Mahesh Jethmalani, son of former Law Minister Ram Jethmalani, is representing both Duggal and Khirwadkar in the legal tangle.

Optimus, which was incorporated as a company on September last year, is also yet to complete its assets purchase of iBackoffice, a customer services company in Bangalore. The transaction should have been completed by February this year.

Duggal and Khirwadkar were high profile recruitments into Polaris in April last year. Duggal was the former CEO of Standard Chartered Bank and Khirwadkar, the former country marketing director of Citibank. They were specifically brought into the company to build its BPO operations.

While Optimus was incorported as a company only on September 25, 2002, Polaris had in the last week of July itself announced the creation of Optimus.

At that time in July, Arun Jain had in a press statement said, "Optimus will be powered by new age management, a responsibility that we have entrusted to Harpal Duggal, who joined us from StanChart and will be CEO, Optimus, along with Suren Khirwadkar, who joined us from Citi, as executive director, Optimus. The very fundamentals of our business outlook are now evolving rapidly and we are now driven by a single aspiration to move ahead of the pack, in thought leadership and market leadership."

Both Duggal and Khirwadkar carried the same desination of 'CEO and Managing Partner' in Optimus and had the same compensation package. A point that was not made during the announcement was that both Duggal and Khirwadkar joined Polaris with the understanding that they would be managing partners and not employees of Optimus.

According to company sources, as per the terms of the agreement signed by Duggal and Khirwadkar, they were to be employees of Polaris only till Optimus was formed after which they would be managing partners with equity stakes in the BPO operations. "To this date, Arun Jain has not given them equity stakes in Optimus," a source told Business Standard.

Business Standard contacted Duggal and Khirwadkar and both cited the court injunction and refused to speak about the affairs of the company or on their current status. When

Business Standard contacted Arun Jain in Delhi, he said that the case was sub-judice and he would not comment either.

Another reason for the disillusionment of the top managemnt of Optimus with Arun Jain has been the apparent unwillingness to invest in the BPO operations. "Arun Jain's recent statement on reviewing the performance of Optimus' operations is a little premature," according to the CEO of a leading Bangalore-based BPO company.

"BPO companies need time to market themselves and in this case Optimus does not even have any infrastructure to its name, so no client will be willing to give them any business," he notes.

According to sources, Duggal and Khirwadkar were brought into Optimus with the express understanding that they would use their professional expertise and contacts to bring in business, while Polaris would contribute the required financial assistance to grow the business.

Optimus has also yet to complete its assets purchase of iBackoffice, a customer interaction services company in Bangalore. Polaris, in December, had announced the decision to purchase the assets of the company, through its wholly owned subsidiary Optimus and made a binding offer for the purchase of the assets of iBackoffice.

The entire transaction should have been completed by February 17. The delay in acquisition could also be linked to a pending legal case against iBackoffice.