Home > Internet > Exclusive: Sanjiv Gupta makes fresh offer to buy AskMe from Malaysia’s Astro Group

Exclusive: Sanjiv Gupta makes fresh offer to buy AskMe from Malaysia’s Astro Group

askmebazaarSanjiv Gupta, former chairman of the troubled hyper-local ecommerce and grocery company AskMe, incorporated as Getit Infoservices Pvt Ltd, has reached out to the controlling shareholder Malaysia’s Astro Group with an offer for management buyout for the third time in as many months. The development comes in the midst of a bitter feud the two parties have been involved in ever since Astro Group expressed its intention to exit the company last year.

In a letter sent to the Astro group earlier this month, Gupta said: “We again request Astro to consider our management buyout offer for the future of the company and survival of 4000 employees and 1000 vendors.”
The letter has been reviewed by Techcircle.in.

The latest request from Gupta followed the hearing at the National Company Law Tribunal (NCLT) on August 31 which directed the parties to maintain status quo and asked Astro not to exit AskMe.

The letter cited above is Gupta’s third formal communication proposing a buyout of AskMe. He had first sent a letter offering a management buyout in June and sent the second letter in August.

“I can arrange primary infusion of funds into Getit Infoservices Pvt Ltd within 100 days, provided the valuation is agreed. This will give Getit Group required oxygen to survive, till we identify a third party investor who can provide an exit to AENL,” he has said in the letter.

Earlier, Astro had threatened to conduct a forensic audit of AskMe’s books on the premise that the ecommerce firm did not turn in any profits despite an investment of $300 million pumped in by Astro. The AskMe management team, meanwhile, accused Astro of trying to flee the country without paying the closure cost of around $76 million.

A person directly aware of the development, however, told Techcircle.in that the Malaysian group has shown little interest in Gupta’s offer so far. The deep resentment between the warring investors and the management team and the fact that investors will practically get nothing after paying up debt and wages are some of the factors that may have dissuaded the Malaysian group from engaging with Gupta and his team on transfer of ownership, said the person.
Gupta was not available for a comment while Astro did not respond to a detailed questionnaire sent by Techcircle.in.

Gupta and other top executives, including chief marketing officer Manav Sethi, AskMe Bazar CEO Kiran Murthy and AskMe Grocery head Ankit Jain were forced to step aside as the company suspended operations in August leaving around 4000 of its workforce in the lurch.

“The valuation that Gupta has offered is less than $100 million which is just sufficient for paying salaries and debt. However, the non-payment of debt and salaries will lead to legal action against Astro. Already, they are facing inquiry on Aircel-Maxis deal. In this context, their unwillingness to opt for a management buyout is inexplicable,” the person cited above added.

Astro has been looking to exit AskMe but has not been able to find a suitor yet. Faced with legal troubles, Astro merged affiliate Maxi Communication-controlled telecom operator Aircel with Anil Ambani-led Reliance Communication and is exiting other smaller digital ventures, too.
Astro holds 98.5% of AskMe shares through its fully-owned subsidiary Astro Entertainment Network Ltd and Gupta holds less than 1% in the venture.

“Astro’s position is that the management is not able to run the company and does not want to engage with them on operational matters,” said another person close to the management. Astro did not respond to a query on steps it has taken to clear AskMe’s dues.

Earlier in a statement, Astro had clarified that it had no intentions of running away from its commitments. “Astro Entertainment Networks Ltd (AENL) has always been a responsible investor in Getit Infoservices over the last six years, and will continue to act responsibly and in accordance with Indian laws,” it had said.

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Awanish Ratan September 15, 2016 20:59

Astro must allow the mbo to happen and must find ways to give the entity to Mr.Sanjiv Gupta …..Mr.Gupta has the might to run this business in troubled Indian market and will save lives of 4000 odd family …

Dr.Mukesh Paul September 15, 2016 21:15

As per my opinion Astro has support buy out offer given by Mr. Gupta as this is in interest of 4000 employees and 1000 vendors accros the pan india, if AENL disagree on the MBO proposal, better to pay its closure cost mentioned in the article and clear the outstanding of 4000 employees & Vendors outstanding till date

Suneel Kumar September 15, 2016 21:34

We are the 4000 Employee of askme but not recd the salary about 3 months

Amit Shukla September 16, 2016 6:50

ASTRO need to cooperate in buy out process. And if at all they are not interested then they should clear all the pending dues of employees and sellers in dignify manner..

Tajbeer singh September 16, 2016 7:27

हम 4000 लोग जिनको पिछले 3 महीने से salary नही मिली बहुत परेशान हैं हमारा पूरा परिवार हम पर आश्रित है हमें कोई फर्क नही पड़ता company संजीव गुप्ता के पास रहे या astro के पास हमें सिर्फ हमारी salary मिल जाये
please sanjeev ji/astro kindly release our balance salary.please help.

Sriram September 16, 2016 7:59

The co. is worth nothing. Obviously Astro is not going to pay without making the CEO and the management pay for their actions in making the company insolvent.

Astro is an overseas investor in Getit. So nobody not even the NCLT can ask them to cough up the dues. Govt of India has not been able to serve summons on Astro in the Aircel-Maxis case and here we are deliberating that non-payment of dues will invoke action on Astro. Who are we trying to fool.

Gopal September 16, 2016 8:08

$300 million isn’t small amount , isn’t it time to introspect ? Askme is into everything it’s time they focus on their core competency and stick to it .! This is a example of how a great brand like Askme / Getit can become extinct

nirbhay September 16, 2016 8:14

I think people yet don’t know Mr Gupta. In last 6 yrs he has made enough money to put MBO to Astro. If he would have saved that money to run the company Askme.com wouldn’t have landed in such a situation. Ask him what is happening at To The New his another venture. Someone as him what happened to the 1st investor – Hellion from they syphoned 70 Crore of investment under their Classifieds Business and later liquidated it. What happened to all the money that was internally transferred to Getit Yellow Pages.

Look at inflated advertising, marketing bills of vendors. Do an audit of money received vs paid to the vendor on the grounds of Tech Development. Someone audit the HCL deal with Getit and why it was knocked-out later. Yes, you will say performance issues. Why was sales turnover 100% each year. Why were employees churned every year? NON-PERFORMANCE! Really? Every Year. Come On!

Someone should audit the alliances done to promote Apps. Look at the ROI and Spends. The Business Travels and Holidays of People. Office Parties. And wasteful marketing spends. That was BRANDING!! Huh!!

And what about the exorbitant salaries of people at the TOP? You call your CMO a Marketing Guru? REALLY!!! Look at the corruption at the CRM levels. The deals that happened under the table.

LOOK at the money made during the acquisition of Grocery, Furniture and Wallet Business..Just MINDLESS shopping. That was not expansion.

Poor EMPLOYEES are suffering.

Sanket Sagathia September 16, 2016 9:28

Both management simply play with the 4000 thousand employee’s career and their lives. Government should took the interest on priority and take some strict action against both the billionaire.

Girijesh September 16, 2016 10:16

I’m surprised to see this kind of activity from a reputed company.. I think management required a behavioural training so that they can understand the thing. Anyway it’s an injustice with employees while both stake holder are disputing.