Jasper Infotech, aka Snapdeal, has filed a FIR against the promoters of Quickdel Logistics Pvt Ltd, the parent company of the ecommerce logistics company, GoJavas. The FIR comes at a time when Flipkart is conducting due diligence on Snapdeal as part of the merger talks between the two.
According to the FIR accessed by Inc42, a criminal complaint has been filed against the former promoters of Quickdel Logistics, which includes Executive Director, Abhijeet Singh, and former promoters Praveen Sinha, Randhir Singh and Ashish Chaudhary.
The complaint has been filed for cheating, forgery, conspiracy, criminal breach of trust and criminal misappropriation of valuable securities and for defrauding Jasper Infotech to the tune of crores of rupees.
The FIR was filed on June 23, 2017 with the Economic Offences Wing of the Delhi Police.
The Allegations: FIR Against GoJavas Promoters
The FIR states that in 2014, the promoters of Quickdel had offered its services to Snapdeal. Based on the representations and assurances given by the promoters of Quickdel, the two companies entered into a Master Logistics Services Agreement (MLSA). The FIR goes on to state that the representations mentioned at the time of the agreement by Quickdel, were however false.
The FIR further states that the former promoters of Quickdel, in late 2014, suggested that Snapdeal invests in GoJavas so that it can scale its operations further and become a sizable market player.
Jasper Infotech acquired shares of Quickdel from the company, Randhir Singh and Praveen Sinha. Jasper acquired 49.99% shareholding in Quickdel by paying INR 119,99,00,000 to Randhir Singh and Praveen Sinha, and INR 237,27,00,000 to Quickdel.
The former promoters of Quickdel were in charge of the management and control of the affairs of Quickdel. Later on, during the subsistence of MSLA, Jasper Infotech received information that the management was defrauding them. Based on the reports of these fraudulent activities, Snapdeal initiated an inspection into Quickdel accounts and books for the period of January 1, 2015, to March 31, 2015, and had engaged KPMG for the same.
A report submitted by KPMG in August 2016 mentioned about illegal, inflated and excess payments made by Quickdel to non-existent persons.
The FIR further states that the promoters deliberately concealed their knowledge of criminal misappropriation from Snapdeal before as well as after receiving the investment.
“The funds invested by the complainant were dishonestly and fraudulently siphoned off and misappropriated by and at the behest of the accused persons… It is clear that the accused persons in collusion conspiracy with each other and other known and unknown persons have made dishonest and fraudulent misrepresentations to the complainant, while inducing the company to wrongly part with funds to the tune of INR 357,26,00,000 and there caused wrongful loss to complainant and wrongful gain to themselves,” the FIR states.
The GoJavas Story
GoJavas (formerly Javas) was launched in December 2012 as a unit of Jabong’s business-to-consumer corporate entity known as Xerion Retail. It was transferred within a few months to an entity called Quickdel.
In July 2016, it was reported that a forensic audit commissioned by German ecommerce investor, Rocket Internet, unearthed several apparent corporate governance violations by former top executives at its fashion portal Jabong. The report found “conflicts of interest” on the part of Praveen Sinha in one of the main aspects of the investigation, mainly the alleged fraudulent transfer of Jabong’s logistics unit, GoJavas, to an entity controlled by Sinha.
Shares in the unit, GoJavas, were later sold to Jasper Infotech. Sinha had denied any wrongdoing at the time.
In August 2015, Oliver Samwer, one of the founders of Rocket Internet, also wrote to Sinha and other founders expressing concern about “not getting the share we should own” and threatening legal action against “everyone involved in stealing this business from us.”
It’s quite likely that this is an outcome of the due diligence being run into Snapdeal by Flipkart as part of the merger talks. Earlier this week, it was reported that Flipkart has dropped its offer down from $1 Bn to just $300-$400 Mn for acquiring the company.