AskMe has explained its inability due to non-payment by Astro Group
Getit Infomedia which runs online commerce business AskMe has not cleared fully the payments of its sellers, apart from the salary of its employees and other dues since January 2015 totalling $15 million. “This is due to non-clearance of payment by the company’s single largest investor Malaysia-based Astro Overseas,” Manav Sethi, group CMO and head digital, AskMe Group told FE.
Astro Overseas, owns 98.5% stake in Getit Infomedia.
“Astro controls and runs the company. We have made a management buyout proposal (MBO) to Astro earlier this year. Astro which was supposed to sign the papers in July is neither exiting the business nor infusing fresh fund. This way it has also blocked our chances of getting new investors,” said Sethi.
In a letter to its vendors, which has been reviewed by FE, AskMe Group has explained its inability to clear the payment due to non-payment by Astro Group.
“The principal shareholder Astro Overseas has breached its written promise and commitment of funding the company of its latest tranch by July 31, 2016,” said AskMe to its sellers in the letter.
The e-commerce firm in the letter further stated that it has always run at the direction and approval of the Astro management and board, who are fully responsible for clearing all dues.
An email sent by FE to Ashok Rajgopal, one of the board members of Astro Group did not elicit any response till the time of filing this story.
Astro Group board members include Khadar Merican – an independent banking professional, former EY consultant Ashok Rajgopal, Malaysia-based consultant Grant Ferguson besides others.
Industry observers, however say that abrupt closure of online business is common phenomenon across the globe.
“When an online commerce business fails to meet the milestone it is but a natural step for the investor to shut the operations. However, Astro’s businesses in India has always got into trouble for some or the other reason,” said Mahesh Murthy, co-founder of Seedfund, the early stage investment fund.
It should be noted that in August, 2014, the Central Bureau of Investigation (CBI) had filed a charge sheet related to Astro All Asia Networks acquisition of shares in Sun Direct TV besides for its involvement in the Aircel-Maxis case.