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The future does not look very bright for the consumer internet search platform, Askme. In a further development, AskMe MD Sanjeev Gupta has sought out Malaysia-based Astro Group, the majority shareholders in AskMe, with an offer for a management buyout again.
Astro currently holds 98.5% stake, through its fully-owned subsidiary Astro Entertainment Network Ltd, whereas Sanjeev Gupta holds less than 1% in the company.
In a letter addressed to the Astro Group, Gupta reportedly said, “We again request Astro to consider our management buyout offer for the future of the company and survival of 4,000 employees and 1,000 vendors.”
The offer made by Gupta is the third formal communication validating the proposal from his side for a buyout. The Malaysian company previously backed out from a supposed MBO (Management Buyout) scheduled at the end of July this year.
In the letter, he said, “I can arrange primary infusion of funds into Getit Infoservices Pvt Ltd within 100 days, provided the valuation is agreed. This will give the Getit Group required oxygen to survive, till we identify a third-party investor who can provide an exit to AENL.”
A source close to the development stated that the Malaysian group has not paid any heed to Gupta’s offer till now. The reasons for this nonchalant treatment by the stakeholder can be accounted to the ‘’the deep resentment between the warring investors and the management team and the fact that investors will practically get nothing after paying up debt and wages”, the source added.
The offer from Gupta comes in the midst of court proceedings and legal tangles that AskMe is caught up in.
Commenting on the valuation and terms of the proposed deal, the source said, “The valuation that Gupta has offered is less than $100 Mn, which is just sufficient for paying salaries and debt. However, the non-payment of debt and salaries will lead to legal action against Astro. Already, they are facing inquiry on the Aircel-Maxis deal. In this context, their unwillingness to opt for a management buyout is inexplicable.”
AskMe’s end has been troubled so far when it finally ceased operations after a proposed management buyout fell through, and enraged vendors approached the Economic Offences Wing to register a case against the company. The company is also accused of non-payment of $14- 22 Mn (INR 100-150 Cr) of dues and has left more than 4,000 employees astray. The vendors have filed a written complaint naming 12 top executives of Astro Group and AskMeBazaar officials.
Following that, in response to a petition filed by AskMe MD Sanjeev Gupta against Astro Group, The National Company Law Tribunal (NCLT) stopped Getit Infoservices from shutting down its ecommerce websites and also issued a status-quo till the next scheduled hearing.
In a letter to MCA Secretary Tapan Ray, BJP leader Subramanian Swamy also proposed providing government assistance to AskMe in order to buy out its 98.5% stake held by Astro Holdings.
The company was also threatened by an unnamed employee with suicide if it failed to pay salaries. Following that, All India Online Vendors Association (AIOVA) met Commerce Minister Nirmala Sitharaman regarding the issue of pending payment from Askmebazaar.com. After the meeting, the Ministry assured Sitharaman of taking up the pending payment issue on a priority basis.
This development was first reported by Vccircle.
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