On August 31, consumer Internet firm AskMe will shut down its operations. The firm has already terminated the services of its delivery boys and has asked employees to work from home.
AskMe had indicated in the meeting held on July 18 between the authorised representatives of majority shareholder AENL and minority shareholders that if deal is not consummated by August 31, they will wound up and adjust US$ 5 million towards closure cost.
AskMe has sent an e-mail to the staffing firm Innov, which used to provide delivery boys to them stating August 31 will be the last day for all the delivery boys. The mail reads: “We would like to inform you that last working date for all delivery boy/procurement boys hired through you. You are requested to prepare the full and final calculation, for all boys engaged through you, as per the terms of agreement and share with us”.
AskMe has also sent a similar mail to all the other employees where the employees have been asked to work from home from August 24 onwards citing temporary suspension of operations while the strategic direction is awaited as the reason. The mail reads, “No employee is required to report to their respective offices/location from 24th August onwards. All are required to work from home.”
The minority shareholders in the company have issued a statement which states, “We don’t find much merit in Astro doing an audit, bid more time thereby holding dues of employees and vendors. It should be noted that the last quarterly audit committee comprised their own nominees. The Astro-appointed audit committee has been there for the last two years overseeing good governance in AskMe.”
They further said, “PwC Malaysia also did a quarterly group audit since AskMe is a subsidiary of Astro, which is a Malaysia based company. Furthermore, to make matters even more problematic for employees, Astro is not even issuing relieving letters (forget dues) to the staff who have resigned, thus marring their future employment opportunities. We also have a mail from them that includes the minutes of meeting between Astro and Getit Group where they have acknowledged the closure costs including salaries. They have already been accused of harassing a female company secretary as highlighted in a formal complaint to the MCA and ROC. All these actions are total departure from professional and corporate ethics.”
The problem between minority shareholders of AskMe Group and its Malaysian owner Astro Holdings had been brewing for some time now.
While minority shareholders of AskMe alleged that Astro had not cleared dues worth Rs 300 crore and was exiting from the company, Astro shifted the blame back to AskMe, questioning their abilities in running day-to-say operations and their inability to meet deadlines due to lack of scale and difficult times in the Indian e-commerce market.
The Astro Group owns a majority (98.5 per cent) stake in Getit Infoservices which owns businesses under the AskMe brand. They made their last cash investment of roughly Rs 150 crore in AskMe in June this year.
Making matters worse, Astro, which was supposed to sign an MBO (Managerial Buyout Proposal) refused to exit the business or pump more money into the company, locking AskMe from all sides since Astro owns a majority stake, AskMe had no other income source to rely upon.
AskMe has been alleging that Astro Holdings defaulted on payments to sellers, own employees and other dues. The bills had amounted up to $15 million from January 2016.
Ask Me was launched in 2010 as a classified portal. In 2012, it came out with Askmebazaar as an online shopping portal focusing on small and medium enterprises. In 2013, Getit acquired AskMe from Network18. Astro acquired a 50 per cent stake in Getit Infomedia for around $20 million in 2010.