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It is 2017 and still the infamous AskMe versus Astro Holdings saga is far from over. As per a recent report by Vccircle, the Delhi High Court has appointed the Serious Fraud Investigation Office (SFIO) to look into allegations of “misappropriation of funds and company assets.”
The development comes in conjunction with the High Court’s appointment of a provisional liquidator for Getit Infoservices Pvt. Ltd. As per an official statement, Justice Siddharth Mridul, in his judgment, has asked the SFIO to investigate company in its entirety.
The High Court, in an official statement said, “In view of the nature of allegations and counter-allegations made by the two groups…It is considered necessary to direct the SFIO to investigate into the affairs of the said company and file a report within two months.”
Commenting on the development, an official spokesperson from Astro Entertainment Networks Limited (AENL) told Inc42, “AENL as the majority shareholder of Getit Infoservices Private Limited, has welcomed the High Court’s decision on 3 February 2017 with respect to the appointment of the Provisional Liquidator (PL). AENL had approached the High Court with a just and equitable petition to seek the winding up of the Getit business as Getit was not only unable to pay its debts, but it was also, prima facie, just and equitable that the Company be wound up, given that the operations had ceased. AENL also welcomes the High Court’s direction on an investigation by Serious Fraud Investigation Office (SFIO) as AENL is keen to understand how its investment of $ 300 Mn was deployed by Sanjiv Gupta and his management team.
As the Managing Director of Getit Infoservices, from 2012 to 2016, Sanjiv Gupta was contractually responsible for managing the day-to-day operations of the company, and is accountable for the use of the funds that AENL has invested in the business from 2010 to-date. Sanjiv Gupta and his management team developed and committed to business KPIs but have never met both operational and financial targets as had been committed to the Getit Board and shareholders. The SFIO has been appointed and hopefully, the investigations will shed light on how funds that were invested were utilised.”
The Never-ending Saga
In August 2016, AskMeBazaar, a venture of Getit Infomedia services, shut down its operations amidst severe cash crunch, alleged to the unplanned exit of Astro Holdings, its principal investor.
This was followed by Getit becoming defunct and the company’s investors Helion Ventures and Astro withdrawing further funding support. The Astro back out from a supposed MBO (Management Buyout) scheduled at the end of July 2016 only added to the company’s downslide. The shutdown, furthermore, left more than 4,000 employees, vendors, and other creditors at AskMe and the investors, in a state of panic.
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.
Some distressed employees company with a suicide note, while some opted for a legal route to get their money back. There was even talk of Rajya Sabha member and BJP leader Subramanian Swamy involving the government in bailing out the company in order to pay the beleaguered employees and vendors.
In December 2016, My Limo Trading Company, led by brothers Mukesh Kumar and Rahul Kumar, sent legal notices to the former directors of Getit Infoservices – Ashok Rajagopal, Sandeep Vats, and Prakash Mishra. My Limo alleged that Getit has not paid them despite receiving payments from the buyers and owed $219K (INR 1.5 Cr) to the company.
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