AskMe, Gurgaon-based online commerce platform has officially shut its operations and has laid off all of its employees.
AskMe’s ecommerce website is live at the moment but it is not accepting any new orders.
A screen grab of Askme website
Persons familiar to the matter said that the closure comes amidst severe cash crunch, due to the unplanned exit of Malaysian billionaire T Ananda Krishnan’s Astro Holdings, its principal investor. Astro Holdings has around 98.5 per cent stake in Askme Group, which owns Askmebazaar, Askmepay, and Askmefin.
Malaysian business tycoon Ananda Krishnan techstory
Because of no further investments from Astro Holdings, Getit Infomedia, the parent company which runs askme.com, is not able to clear payment. Astro acquired a 50 per cent stake in Getit Infomedia for around $20 million in 2010.
Vendor payments, employee’s salaries and other bills worth $15 million are pending from January 2016.
Pushed against the wall by Astro Holdings, Getit Infomedia has knocked on the doors of Ministry of Corporate Affairs (MCA) and Registrar of Companies (RoC) asking them to ensure that the Malaysian investor does not exit the country without meeting its liabilities and commitments.
GetIt Infomedia had publicly asked Astro Holdings to clear the payments; however, no further statement or funds were released by the company.
“Getit Group also does not have the financial capacity to pay to the creditors as the total liabilities of the group have exceeded the assets by around $50 million and Getit Group has no tangible assets that could cover these liabilities,” states the letter to the government officials.
Manav Sethi, Group CMO & head of digital strategy at AskMe Group, had earlier said that the company did not have enough money to sustain its operations and support its 2,500 strong workforce.
Manav Sethi, Group CMO & head of digital strategy at AskMe Group indiaretailforum
Making the problems worse, Astro was supposed to sign the Management Buyout Proposal (MBO) but eventually refused to exit the business or infuse more capital into the company. It hit AskMe hard as all doors were shut for the company since it could not raise money from any other investor to clear off the dues and continue the business. For the last two months, the employees are not being paid the salaries – making the matters out of hand.
The shutdown has left more than 4000 people including employees, vendors, and other creditors at AskMe and the investor, in a state of panic.
AskMe.com was launched as a classifieds portal in 2010. In 2012, AskMe came out with Askmebazaar as an online shopping portal focussing on small and medium enterprises (SMEs). Later in 2013, Getit acquired AskMe from Network18. The portal was operating with over 120K merchants, in over 70 cities, including metros and Tier II cities as well. It also diversified into hyperlocal space.