AskMe Group Suspends Operations
Askme, a Getit media company, has frozen its operations and is on a virtual lockdown. The company, sources said, has shut down most of its offices including its main office in Gurgaon as it failed to secure funds. Insiders have indicated that there would be a complete shutdown on September 1.
The former listings company, which had pivoted to an online marketplace, e-grocery, finance, among other businesses has run out of cash. The top brass including CEO Kiran Murthi, CFO, Anand Sonbhadra and CMO Manav Sethi, have all resigned.
According to sources in the company, employees most of whom who have not been paid their salaries have been asked to leave. In a statement, the company alleged that Malaysia based Astro Holdings, which owns 95 percent of Askme Group, is trying to flee the country without paying dues to employees and sellers.
In a statement, Astro Entertainment Networks Limited (AENL) said on Friday, that it has since 2010 made substantial investments totaling nearly $300 million to keep the business afloat during the most 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 said.
There are 2,000 employees (with unpaid salaries) and over 150,000 vendors (whose dues are to be settled). AskMe, technically, does not have any top management to make decisions. Unconfirmed reports said that no directors will be appointed any time soon to sort out the dues.
Getit Infoservices owned by Malaysian billionaire T Ananda Krishnan's Astro Holdings is the majority shareholder in Askme Group with also owns Askmebazaar, Askmepay, Askmefin among others.
The company had tried to trigger a management buy back from Astro, which failed as well. In June this year Astro Holdings decided to sell its stake in the company, Manav Sethi, group CMO and head of digital strategy, Askme had confirmed then. He had added that they were already in talks with three foreign investors to pump in around $200 million to make the stake sale happen.
The top management, reportedly, had offered to pour in their own cash into the company to keep it afloat and buy out Astro. The offer, sources said, was not substantial. Reports said Astro has invested close to Rs 800 crore into the company and wants a substantial portion of it back.
Trouble in the company started in February when it tried to raise $150 million-$200 million at a valuation of $1 billion. But nothing came of it. It could find no investors. Astro, at the time, was willing to dissolve its stake to infuse liquidity.
In May, Askme, in its attempt to control the cash burn, asked 650 people to resign. The company, at the time, said it was outsourcing some operations and automating other jobs, which resulted in the forced resignations. "We have almost all but shut out the outgoing call centre. We had given them a lead generation programme and we are looking at that before settling their dues," Sethi told Business Standard in May. The company had over 2,500 people on its rolls before the rationalisation.
Two weeks back, Business Standard had reported that the company had run out of funds and couldn’t pay its employees or vendors their dues. The company at the time was in discussion with Astro, the Malaysian VC that owns 99%, and had requested a reprieve but nothing came of it.
Askme, had in an effort to build pressure on its investor, had sent emails to its vendors and employees to write to Astro and demand their payment back.