AskMe gasps for breath as investor Astro files ‘winding-up’ petition

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Once popular – and now defunct – ecommerce startup AskMe is breathing its last. The startup’s biggest investor, Malaysia-based Astro Entertainment Network (AENL) has filed a petition in the Delhi High Court to close down Getit Infoservices, AskMe’s parent company.

The move thwarts all efforts made by AskMe co-founder and CMD Sanjiv Gupta to prevent the ecommerce startup hitting insolvency. In the past, Sanjiv has repeatedly locked horns with Astro, blaming the investor for withholding funds, and eventually pushing it to the brink of failure.

Astro, on the other hand, has squarely put all responsibility of AskMe’s debacle on Sanjiv, citing an agreement signed during Astro’s entry that entrusts him with the functioning of management.

“The company could not meet its performance target as stipulated in the business plan and the company’s actual expenditure exceeded the budgeted expenditure,” states the petition filed by Astro. Tech in Asia has seen the papers.

See: The sordid saga of a $300 million-funded startup going bust in India

Astro has urged the court to appoint a liquidator to shut the entire business “both on the grounds that it is insolvent and that it is just and equitable to do so.” The court was slated to hear the petition today, but has adjourned the session to January. It is likely to heed Astro’s demand, as it is the majority shareholder.

It may also designate a buyer, who will have to carry the burden of paying off Getit’s debts and liabilities that amounts to over US$80 million. As of July 2016, AskMe recorded losses of US$60.7 million.

“AENL is interested in assessing the events that led to the current state of the business, and will work with the court-appointed liquidator to carry out this exercise,” the investor said in an email response. Sanjiv did not respond to repeated calls and emails from Tech in Asia seeking comments.

Ranbir Kapoor was allegedly paid US$1.8 million to endorse AskMe. Photo credit: Tushar Rastogi.

The blame game

The move to shut down AskMe is in line with Astro’s earlier statements where it expressed the need for a court-appointed liquidator to decide AskMe’s fate. Astro wants a third party liquidator to step in because of the stalemate between Getit board of directors – including Sanjiv, Sidharth Gupta, Ramesh Gupta – and the investor.

Astro says that the Getit board has resorted to hostility and has deliberately delayed and obstructed decisions related to the closure of the company. AskMe’s board of directors met in June 2016 for the last time before things turned sour. As per Astro, any further attempt for such a meeting “has been blocked by the promoter group.”

“The company is left with two directors but no board meetings can be conducted without leave of National Company Law Tribunal (NCLT) due to the proceedings instituted by Sanjiv Gupta,” Astro states in the petition.