With Getit Infoservices-owned AskMe finally pulling its shutters down, enraged vendors have approached the Economic Offences Wing to register a case against the company.
Allegedly, the company is accused of non-payment of INR 100-150 Cr of dues and has left more than 4000 employees astray. The vendors have filed a written complaint naming 12 top executives of Malaysia-based Astro Group and AskMeBazaar officials.
On Sunday, vendors along with its employees also gathered outside the Noida office to protest.
All India Online Vendors Association (AIOVA) is also doing its bit and has gained the attention of Minister of Commerce Nirmala Sitharaman in the matter. “A complaint has been filed with the local police station of each city of operations to get more attention on the issue,” said Kush Agrawal of AIOVA.
These steps were taken as all attempts of the sellers on AskMe’s platform went in vain to get in touch with the management of both the companies.
AskMe had already raised its hands weeks ago on the issue of payment of dues. As stated by an employee to ET on August 9, they received an email from Getit, stating they cannot pay salaries and asked the employees to reach out to the management of Astro with their demands. From August 24, all were asked to work from home instead of coming to office.
In another development, AskMe has taken the battle to the National Company Law Tribunal (NCLT). According to the petition filed, AskMe Group MD Sanjeev Gupta has asked the NCLT to issue an order to maintain the status quo, reserving the present status of assets available with the company. Additionally, AskMe wants the NCLT to direct Astro to refrain from diluting its stake in AskMe and for not to change the board of the company. As a final blow, the AskMe MD also wanted to initiate a management buyout.
As per the petition, Astro owes $50 Mn (INR 300 Cr) to the company and AskMe is looking forward to use the funds and provide relief to the employees with the help of the NCLT.
The NCLT will hear AskMe’s plea in tomorrow’s session.
AskMe.com was launched as a classifieds portal in 2010. In 2012, AskMe came out with AskMebazaar as an online shopping portal focussing on small and medium enterprises (SMEs). Later in 2013, Getit acquired AskMe from Network18.
The portal was operating with over 120K merchants, in over 70 cities, including metros and Tier II cities as well. It also diversified into hyperlocal space with AskMebazaar’s next day delivery capability and in the fintech space with AskMePay’s AskMeFin. It had also invested $20 Mn in online furniture marketplace Mebelkart in August 2015 and acquired online grocery marketplace BestAtLowest.com.
The story started way back when more than 650 employees of the company resigned in April this year. After pumping in more than $119 Bn into the company, the existing investors Helion Ventures and Astro holdings (which owned the majority stake) found no scope of further growth in the company. While Helion pulled back from further funding, Astro backed out from a supposed MBO (management buyout) scheduled at the end of July this year.
The unplanned exit forced AskMe to shut down amidst severe cash crunch leaving more than 4000 employees, vendors, and other creditors at AskMe in a state of panic and with no clue how to deal with the situation. Earlier in August, they wrote an open letter to Astro Holding’s head requesting to release the salaries for the month of July. The letter also revealed a few inside horror stories in Astro as well.
“…your foreign directors were recently replaced with “on hire” CA firms in India. A sudden decision to replace these directors is I believe illegal and will complicate matters further for Astro, a company which is already facing the heat on account of the 2G scam. Astro was chargesheeted in the CBI in Aircel Maxis case for fraud and cheating and had to exit Indonesia for the same charges…..”
However, this did not stop the inevitable from occuring. AskMe has shut down while employees, and vendors, are forced to spend their crucial years of life in a legal tangle.
In an email response to an earlier Inc42 post, Astro Holdings said:
“Astro Entertainment Networks Ltd (AENL) has, since 2010, made substantial investments in Getit InfoServices Pvt Ltd to participate in and support India’s fast growing e-commerce industry.
AENL made sustained and long term investments in Getit totalling nearly $300 million to date to keep the business afloat during often volatile market conditions. Unfortunately, Getit has not been able to make its business profitable and sustainable despite these huge investments by AENL. An independent review by advisors has concluded that there is little prospect for turnaround and the business is insolvent. AENL intends to appoint a forensic auditor to review Getit’s books and will take appropriate steps based on the results of that audit.
Contrary to recent media reports, AENL has always been a responsible and patient investor in Getit over the last six years making every effort possible to support the business even as other investors withdrew. AENL has at all times been fair, scrupulous and professional in its dealings with the management of Getit. AENL will continue to act responsibly and in accordance with Indian laws over this matter.”
This development was first reported by ET.