Exclusive: How the AskMeBazaar scam unfolded

Exclusive: How the AskMeBazaar scam unfolded

Even a month after shutting down the services, AskMe Group’s issues with investor Astro is far from getting resolved. Even as the group’s management and Astro continue to throw mud at each other, here’s a stock of what this issue of all about, how it started and how bad is it turning out for its employees and the vendors.

Even a month after shutting down the services, AskMe Group’s issues with investor Astro is far from getting resolved. Even as the group’s management and Astro continue to throw mud at each other, here’s a stock of what this issue of all about, how it started and how bad is it turning out for its employees and the vendors.

It was August 17 when snapshot of an email sent to select employees started floating in AskMe’s office. It was sent by Anand Sonbhadra, group chief financial officer of Getit Infoservices Pvt Ltd that runs AskMe. The mail asked respective executives to disable transaction and payment options on the websites.

There was panic in the air, said an employee who saw the snapshot adding that since there was no clarity coming from the management, most of the people packed up early and left. Being a festival day (Rakhi), it was comparatively lean in office on Thursday.

However on Friday it was all over. Online platforms started buzzing with reports citing suspension of services by AskMe due to lack of funds. But this was just the beginning.

Mudslinging by both the parties — the investors and the co-founders — was yet to start.

AskMe issued a statement citing that Astro which owns 99% of Askme through various shell companies is trying to flee the country without paying employees and vendors and statutory authorities in Askme and other companies.

It also alleged that the employees have given Astro a management buyout option which they are not agreeing to. The group also asked the vendors to directly reach out to Astro for their dues.

Astro Entertainment Networks Ltd too issued a statement saying that it has invested $300 million in Getit Infoservices so far. “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,” it said adding that it intends to appoint a forensic auditor to review Getit’s book.

‘Management continued to overspend’

Almost 4,000 employees are clueless about their current position in the company. They have not been paid for the last three months and have neither been given relieving letters. The group owes Rs 300 crore to its employees and vendors.

“I am not able to join any other company as I am worried what will happen to my full and final settlement, in that case,” said a senior AskMe executive requesting anonymity.

According to experts, in this sort of a scenario it is very difficult to say whose liability is it actually to pay the dues.

While in usual circumstances, it becomes the liability of the directors to clear off the debt. However what could over right this whole thing is how the shareholder agreement is written. If the contract provides otherwise, says it is the liability of a specific party, then it can be a different thing, said a lawyer requesting anonymity.

For now, the creditors have the option to apply to the court for winding up and recover the asset, he added.

In an email response, Astro has also said that it is possible that the company will now go into court managed liquidation and once the court appoints a liquidator, the situation will be accessed and managed.

Astro has said that AskMe was not able to meet any of their business KPIs (key performance indicators) quarter on quarter, and the management continued to overspend their budgets, despite being cautioned against it. Astro however did not specify the number of orders.

According to a February report in The Economic Times, AskMeBazaar was telling investors (it was reaching out to raise funds) that it had crossed annualised gross merchandise run rate of $500 million and was planning to hit $1 billion soon.

Black Diwali for AskMeBazaar employees

According to a person, privy to the matter, of late, AskMeBazaar was not able to fulfill orders. It would accept orders and after sometime, notify that the same couldn’t be fulfilled.

This was not one of such occurrence but something very frequent, he said.

According to him, this helped company grow its gross merchandise volume, but its gross traction volume used to remain low.

An AskMe executive accepted that this had become an issue with the e-commerce portal. He however said that it started started happening only towards April-June time frame, when the company was struggling for funds. “When the funding stopped, we were not able to procure the orders at the decided costs,” he said requesting anonymity.

It is festive season all around. E-commerce sector is booming with offers. But AskMe employees can only hope and keep their fingers crossed that there comes out a solution to this crisis so that they do not lose out of their hard earned money in a blink.

Last year, it was TinyOwl which had laid off 110 employees just before Diwali. This year, it will be a black Diwali for AskMeBazaar employees.

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