We have earlier written about rise and fall of Subhiksha, which generated quite a buzz. Many of the commentators on that post are referring to Mr. Subramaniam as self styled “Sam Walton of Indian Retail”.
Have you given a thought on how this Subhiksha mess will affect Indian startup Ecosystem. Alok Kejriwal (Founder of 2win group), on his latest blog post has put across 5 questions that I think we should seriously look at.. Alok believes, that Mr. Subramaniam’s actions and representations to the media may jeopardize the fragileÂ VC-Start Up’s ecosystem that is being built in India.
Before I put those questions across, I would like to reproduce a comment that we got on our Subhiksha post earlier, it is quite interesting…
P Suryanarayanan wrote,
Subhiksha’s fall is something to do with the DNA of its founder,the self styled Sam Walton of Indian Retail(!!!!!). I know this guy right from the days when he was an executive in Enfield. His arrogance was stunning even in those days. And when such a person by hook or crook establishes a company then it will be a manifestation of his arrogance and the end is very natural. In Subramanian’s dictionary there is no word as Humility.
This comment may sound like it is coming from a disgruntled guy, but I have heard similar sentiments from my discussion to few other people as well. Do any other trak.in readers concur?
Here are 5 Questions put by Alok Kejriwal to Mr. Subhiksha aka Mr. Subramaniam
- Why are you objecting to another audit by ICICI Ventures?
- What are you hiding?
- Isn’t the lead investor in your company allowed to ‘reassure’ by hiring a professional agency that what you record in your books is really correct?
- Why are you legally challenging ICICI Ventures and investors about their rights and privileges?
- Any sensible entrepreneur who raises private equity understands that ‘risk’ capital will come with a set of safeguard measures that will only help investors safeguard their capital. Try raising money from money lenders or banks or financial institutions to understand how rigid and demanding their safeguard criteria can be.
- Of course ICICI Ventures will have a say in board composition, decision involving critical company affairs etc etc!Â Is Mr. Subramanian a child to think that he will be given all that venture capital without any questions asked? Also remember, no VC ever wants to control or run a company – they invest in entrepreneurs to do that. They only keep certain control mechanics in place so that any invested company doesn’t go haywire
- What were you thinking when you stopped paying Provident Fund dues?
- This is the most bizarre part of the Subhiksha debacle. How can anyone expect to renege on PF payments? Yes, I know cases where companies delay PF payments in terms of working capital bottleneck situations, but it cant be avoided! I guess tomorrow we will hear Subramanian asking for a ’settlement’ with PF also
- Why did you wait for so long?
- Any businessman knows when the tide has turned against him and when the ship has begun to sink. If the ship is sinking, you gather your men and safely get out of the boat. Subhiksha was not struck by fire or a tsunami that caused overnight losses. In a paper thin trading business of groceries, if you sell at less than what you buy, it doesn’t take a Wharton MBA to tell you something stinks. I really question what Mr. Subhiksha was thinking?
- How dare you even propose a reverse merger of your company into some obscure unknown company?
- With the mess Subhiksha is in, shouldn’t the priority and time spent be on selling out non perished stocks, winding down rent agreements, recovering dues from consumers etc rather than concocting the hijack of your own company by some shell construction company who is a Chennai listed firm? This reminds me of those young kids who get their friends to kidnap them so that their parents can shell out some ransom money.
As always, your comments and views are highly appreciated.