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Tech Mahindra is an IT outsourcing giant, and even sponsors its own racing team. Photo by Xavier Bonilla/NurPhoto via Getty Images.

Private equity firms rarely sue their limited partners, let alone well-heeled ones. But that's exactly what's happening between San Francisco-based Northgate Capital and Indian outsourcing giant Tech Mahindra, according to court documents.

The bottom line: The dispute had remained behind the closed doors of arbitration, but spilled out into the public after a witness didn't show up to testify.

  • June 2015: Tech Mahindra commits to invest $40 million into a fintech-focused fund being raised by Northgate.
  • September 2016: Northgate calls $1.04 million, in order to cover expenses. It is the first capital call, and does not relate to an investment. Tech Mahindra doesn't pay.

Seems at first like a cut-and-dry contract violation, but then you need to factor in the major personnel turnover at Northgate, which was originally founded in 2000 by former pro football players Brent Jones and Tommy Vardell.

  • In between Tech Mahindra's commitment and Northgate's call, both Jones and Vardell left their full-time roles at Northgate.
  • Their departures were at first denied by The Capital Partnership, an overseas investment firm that had acquired a majority stake in Northgate from another third party.
  • This mattered because the limited partnership agreement included a keyman clause related to the departure of Jones, Vardell and a third person who had already bailed. Tech Mahindra claims it didn't receive the notice to which it was entitled and that its non-payment came after it learned the truth.
  • Tech Mahindra also alleges that Northgate didn't make a good-faith effort to find other investors, as it had been promised, while Northgate claims Tech Mahindra initially refused to pay because it claimed to have not received Indian regulatory approvals that it actually had received.

Complicating things is the matter of Hosein Khajeh-Hosseiny, who was promoted from Northgate managing partner to CEO once The Capital Partnership assumed control. He also was listed as a sole keyman in the LPA, but left this past summer.

  • His departure doesn't affect the LPA, per se, but Tech Mahindra wants him to testify in-person at an arbitration hearing.
  • Khajeh-Hosseiny agreed to testify tomorrow (Nov. 2), saying it was best for his schedule. But when the broader arbitration hearing commenced this past Monday, Khajeh-Hosseiny's lawyer said he was overseas and would be unavailable indefinitely.
  • That lawyer tells me that Khajeh-Hosseiny, a British citizen who already provided hours of testimony via a taped deposition, is stuck in London, awaiting administrative approval of his travel visa. He had expected to have it by now, but doesn't.

Tech Mahindra is asking for Khajeh-Hosseiny to be held in contempt of court — and it was his non-appearance that moved all of the relevant court docs from private arbitration into the public sphere.

Go deeper

13 mins ago - World

Pope Francis denounces European governments' migrant response

Pope Francis adresses refugees at the Reception and Identification Centre (RIC) in Mytilene on the island of Lesbos on Sunday. Photo: Louisa Gouliamaki/Pool/AFP via Getty Images

Pope Francis criticized European countries' response to asylum seekers during his visit to a migrant camp on the Greek island of Lesbos Sunday.

Why it matters: The pope said "migration is a humanitarian crisis that concerns everyone," but little had changed in the global response to displaced peoples since his first visit to Lesbos five years ago, per a transcript of his remarks. "Human lives, real people, are at stake. ... let us stop this shipwreck of civilization!"

Chris Cuomo accuser: On-air "hypocrisy" spurred report

Journalist Chris Cuomo. Photo: Gilbert Carrasquillo/GC Images

A woman who accused fired CNN journalist Chris Cuomo of sexual misconduct said Sunday she decided to come forward after learning of his comments about women who made similar accusations about his brother. He denies her allegations.

Why it matters: Her attorney Debra Katz said in a statement that she heard "the hypocrisy" of his on-air words about his brother, former New York Gov. Andrew Cuomo, and was "disgusted by his efforts to try to discredit these women," so "retained counsel to report his serious sexual misconduct against her to CNN."

Updated 6 hours ago - Politics & Policy

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Illustration: Shoshana Gordon/Axios

  1. Health: CDC director says number of U.S. Omicron cases "likely to rise" — Two years of COVID-19 — Prior coronavirus infections may not protect well against Omicron.
  2. Vaccines: Data demonstrates most-vaccinated counties less vulnerable to worst of COVID — Omicron adds urgency to vaccinating world — Omicron fuels the case for COVID boosters.
  3. Politics: Nevada to impose insurance surcharge on unvaccinated state workers — New Jersey GOP lawmakers defy statehouse COVID policy — Oklahoma sues Biden administration over Pentagon vaccine mandate.
  4. World: Vaccine mandates lose steam in the U.S. while Europe doubles downWHO: Delta health measures help fight Omicron — COVID cases surge in South Africa in sign Omicron wave is coming.
  5. Variant tracker: Where different strains are spreading.