vMoksha Founder Quits In The Wake Of A Revenue Crisis
I have visited vMoksha Technologies Ltd, a Bangalore-based IT company, along with a few visiting venture capitalists from the TiE Silicon Valley chapter. It was sometime in February 2004.
Now I hear that its chairman and CEO and also the co-founder, Pawan Kumar, has quit the company and joined Scandent Solutions Corporation. Kumar is the new President of Scandent.
Today’s Economic Times reports that Kumar has sold his 50 per cent stake in vMoksha to his Gulf-based NRI partner Rajiv Sahani. He has been quoted in the story that the company has been facing some problems. Its revenues of $15 million in 2004 are down to $13 million in 2005, and they are expected to come down to $9 million this year.
It’s a classic case of entrepreneurs quitting when the downturn comes. Any thoughts on this?
02/8/06, 11:42 AM |
Umm….no…but a classice case of judging people too quickly a la Indian style. we have no idea what happenned with the company, what the dynamics between the partners were or how the exit was structured. instead of lauding people for taking risks and doing something entrepreneurial, we, as a nation, constantly look to bring that person down….be it in any field. i think we need evolve as a society and move on. life is a series of projects for entrepreneurs. let us not jump and judge them.
you are providing a good medium for the vc/pe community. stick to the facts - you will doing all of us in the community a huge disservice if you did not.
02/8/06, 12:49 PM |
Why would you say “classic” case of entrepreneurs quitting in a downturn? That’s pointing at a few examples and saying all Indian entrepreneurs do that. Do you think this never happens in Silicon Valley?
Entrepreneurs leave for several reasons. We should all try to shed the “classic” Indian habit of looking for the negative possibilities to write someone off. Silicon Valley is what it is because people look at adverse situations and try to learn what went wrong and how they can benefit from that experience.
BTW, I do want to also say that you have created a good forum for VC and entrepreneurial interests and I commend you for it.
02/8/06, 1:31 PM |
Thank you very much for your comments. I should admit that my views are not supported by facts or any official comments from the company sources.
Interestingly, I had a chat with a VC friend today, and heard that a company he had funded is in limbo because the founder-CEO left the company. Now he is left with two options - shut down the company or look for another CEO. Most probably he may go for the option number one.
Maybe, my views on Pawan Kumar of vMoksha was coloured by this background. I would like to temper down my views of “entrepreneurs quitting” since I don’t have the definite information on this. But the ET story says Pawan Kumar would like to go back to the “corporate world” while the revenue dip has been given as a reason. I am leaving this for the interpretation of the readers.
02/9/06, 12:18 AM |
Wasnt vMoksha acquired by Helios Matherson? So, whats the fuss about Pavan Kumar quitting. Maybe it was a part of the acquisition package
02/9/06, 9:48 AM |
thanks for the clarification. your conversation with the vc friend may indeed have coloured your comments.
that being said, we should also realize that venture capitalists make many bad calls too ! for every success, there are about 10 failures that venture capitalists do not like to discuss. ask them directly - and they will respond that yes, they like to bury their dead very quickly.
what would be interesting to read in such a forum would be horror stories entrepreneurs have had with VCs - who had no understanding of how to scale businesses, add value to companies and actually destroyed value in the process.
i can tell you from experience about a board meeting i was in where a senior VC from boston was participating by calling in from his home. despite the seriousness of the topics being discussed, the conversations had to be stopped at awkward moments whenever the VC flushed his toilet. as it turned out, he was calling in from his bathroom !
so, yes - although VC can bring some value to companies, a lot of great companies have also been built without VC involvement. let us not rush to raise all VCs to a pedestal….and let’s hear some war stories from entrepreneurs about their experiences w/ VCs…i am sure there are many out there !!!
02/9/06, 10:14 AM |
Hey, thanks for this note on the “lighter” side of the VC involvement!
02/10/06, 8:51 AM |
I am not surprised. Pawan, has a chequered background for fleecing Cos, and moving on to ‘better’ jobs.
In India entreprenuer means ‘jugaad’ meister. I have dealt with pawan and vMoksha, never had anything of significance, but v.good in optics and financial engineering.
I am shocked that he moves to Scandent, another chequred Co in the IT space, should be in the jugaad, create false valuation, and exit space!Started of by Ramesh Vangal and Mike Khanna, with many owners in between it has enough credibitility in the IT space as bugs bunny has as a wabbit catcher!!
Former CIO
02/11/06, 10:14 PM |
The waters flow much deeper than is visible! I think Pawan’s partner, Rajeev Sawhney (the person to whom the other fifty percent stake was “Sold” to) would have a good perspective!!
Bottomline - This company was never a “classic” case right since its inception, and hence Pawan’s quitting is no reflection on Indian entrepreneurs
02/12/06, 5:42 AM |
This whole block of information exchange is only on surface and it is not possible for any one to go to depth unless one of teh stake holders open their mouth. In general, a founder is a creator and he breathes process of creating every day. ideally, He would never leave creation unless face and roadmap of it is changed. More often than not, VC do bring such practices that they kill the creation and value creation and founder can no more relate to his creation. This is teh time, if he has easy way out( that is if he has made his money), he will quit and if he can control the destiny, he will move others out to clean up his vision and roadmap again… So many factors decide what steps a founder and enterprenuer will take that alone he is not to be blamed for disater.
02/12/06, 3:53 PM |
Hi PVS,
I have’nt met Pawan or know him well but from what I have heard he is a serial entreprenuer.
He is been an entrepreneur in India since India(small reference to him at http://ss.emergic.org/archives/2005/05/21/spirit-of-entrepreneurship/) not even knew about that word in its modern incarnation. It is the nature of serial entreprenuers to build a startup and to take it to a good enough level and then move to the next one. I don’t know whether it is the rough weather that made him to move to out of his current setup I would suspect that it could (partly) due to his serial enterprenuer calling.
Rajan
http://rajan.wordpress.com
02/15/06, 1:12 PM |
vMoksha has been in troubled waters for sometime now. They had a very high attrition rate too. I’ve interacted with a few of their employees and looks like the employee morale has been on the down side.
The most puzzling to me was how did Helios & Matheson acquire a company facing revenue crisis and that too at a premium of $19m. There are a host of other questions too. Looks like Rajiv Sawhney the other director at vMoksha was kept in the dark in this merger. Once Rajiv got wind of this he took up the issue with Pawan. Pawan immediately quit surrendering his holdings to Rajiv. There is also another news i heard. Looks like vMoksha paid Helios & Matheson $13m for the acquision whereas it should have been the other way around.
The real losers are the middle class investors who were taken for a ride in this whole issue.
Any comments on this from anyone who might have more information?
02/19/06, 5:46 PM |
vMoksha has been crippled by destructive fighting between Rajeev Sawahney and Pawan. That did impact revenues because Rajeev has also been writing to customers and prospects. Rajeev Sawhney is a man with questionable intentions and the current CEO (stop gap) colluded with him (speculation) to bring Pawan’s downfall.
Many employees were let go without anything in writing, without notice and the management team is not paying them while trying to get new business. This is fraught with risks and will bring a plethora of law suits.
The company in its current state will end up harming many more employees’ careers, customers and is a black mark on the reputation of Indian IT industry.
02/22/06, 2:54 AM |
Helios And Matheson Information Technology Limited has informed the
BSE &NSE Exchanges on February 20, 2006 as follows: “We understand from our counsel that the Hon’ble Justice S. Rajeshwaran was pleased to pass an order of interim injunction restraining Mr. Pawan Kumar from carrying on any business or taking up any new employment or continuing in any other employment. The Hon’ble Justice was also pleased to pass an order restraining Mr. Rajeev Sawhney, his associates and nominees from
functioning as the Chairman and / or Chief Executive Officer or from
altering the managerial structure and functioning of vMoksha Technologies
Pvt. Ltd. These orders were passed in the High Court at Madras today at
about 3 pm on an application moved by us. We are awaiting the order copies”"
So any updates after this-anyone
>for full particulars thereof and shall fax you a copy of the same as soon
>as our counsel receives them”"
>
02/27/06, 1:21 AM |
Update is in www,suchetadalal.com -Where Rajeev Sawhney has writtent to various agencies and claims the injunction was obtained wthout his being given notice by the co &the court –and opportuntiy to represent or respond in court. He states further the deal failed in Sept 2005 itself and was reversed .and that he is moving he High court to have the order &restraints vacated
03/19/06, 12:24 PM |
Haa…
A classic example of a twisted tale of facts and intention to sensationalize on part of a person whose alikes are just looking for some easy money. They call themselves journalist but lack the basic acumen required to be called so. I really wonder their credibility to make such bold statement without doing basic homework. It seems he calls Pawan’s resigning from vMokhsa as “It’s a classic case of entrepreneurs quitting when the downturn comes”. I don’t have details of the financial transactions happenning in this context but being a person who knows Pawan for quite a large and significant part of my life, I thought of sharing these facts with you all. My intention is just to bring out the point that there could be several reasons for Pawan to leave vMoksha but looking for greener pastures or being afraid of failures is ceratininly not one of them.
Mr. Sahad, if you are in the profession of business reporting you must have done your background work. Pawan has never lead easy moments in his life. Downturns are never the factors which make him leave the job half done. Do you know Pawan hails from a small town in Western Uttar Pradesh. It was purely on basis of never say die attitute he made to the best educational institute i.e IIT, Kanpur. Being from UP Board with Hindi as a medium of education, he had tough time to cope up with fast running lectures in the classes. But this kid at that point of time didn’t give up. Later it was purely his desire to do big that he stayed back to do his post graduation. And continued to work in the Comp Centre (Known to be the best in India with latest IBM Machines). After gaining sufficient confidence and experience in the environment of IIT, K, Pawan decided to join the TCS.
Yes, Pawan joined TCS way back in those early seventies, when the fever of brain drain was at its peak. He was the one who could have easily joined the league of his friend who left to United States. He worked in TCS for good couple of decades. Under his leadership till the time he left TCS around very early ninetees, Northern Operations of TCS were by far the biggest and most impressive. I think he left TCS not because he was looking for money but just because he wanted to explore his potential and capabilities in more rough waters. Again, note, he could have easily stayed back with TCS, as it was the time when IT started becoming a serious business. He could have easily been at the top most position in TCS by now. Later he joined companies like Fujitsu promoted by his friends in Thapar Group, helped them to do things. Later, joined IBM around middle 90s. IBM was emerging out of grave problem under the leadership of Lou Gerstner and was looking to expand its Services base in the emerging geographies. That’s where Pawan stepped in and created what is known to be the biggest and best Services company in India i.e IBM Global Services India. He was the President of IGSI when he quit this position because he knew that there is something more challenging waiting for him ahead. Again note, around that time in 2000, IBM had started growing in India…Pawan could have easily stayed back.
He moved onto join DSQ and did right thing to quit, as I heard on TV few days ago about the kind of mess its founder Dinesh Dalmiya was getting the whole DSQ group into at that point of time. At that time, Pawan did make a brave attempt to move out of that thing and started his own company. I really don’t know what made him do away with his baby. But certainly not the financial crunch….I read in some replies above about the state of employees etc…well I really dunno the details of his business but can say one thing..OK even if you hold him responsible for it…then why can’t you take it in a positive way like this…”Even though he would have loved to hold his baby i.e vMoksha, he decided to part himself away from it so that may be others can do some godo to it.” I am sure you will never post this as a question and seek people opinion on blogs for it.
Also, Pawan is the one who believes in giving back to the world whatever he has achieved. He had nurtured and groomed countless IT professionals in his long career spanning three decades. You will find many CEOs and Senior Leaders across the IT industry taking his name with Reverence. I also heard that at times some of them are seen touching his feet. Also, he has been active contributer to community with self-less appeal. He has strong desire to give back to the world what he gets.
So, pls be careful in making statements about people in general. anyway, I know my words won’t have any impact on you or any other journalist. More the fact that its a democratic country and people like you also have a say in this society….
Phew…God bless you…
03/21/06, 12:35 PM |
Good job Venkatesh. I have known Pawan and in an Indian IT industry full of “get rich quick” artists, he is a rare breed who “nurtures” people. Perhaps that is the reason why a person of Naveen Sagar’s (the current CEO) credentials managed to stab him in the back.
Today, the new management under Rajeev, Pawan’s partner are building a culture of deceit and take pride in not paying professionals and senior people who worked under Pawan at vMoksha. Their crime-Pawan hired you. Little do they realize that it is a small world and a business cannot hide in Bangalore with poor credit and poor reputation.
Though I am stunned at contempt of court from Pawan and Rajeev because they continue to function in the face of HC order.
03/30/06, 1:42 PM |
Hi All,
Pawan recently received the Distinguished Alumni Award from IIT, Kanpur. Read more at:-
http://www.iitkalumni.org/daa/DAAProfile2.asp?id=47
http://www.iitkalumni.org/daa/lastyearsDAA.asp
03/30/06, 1:46 PM |
Incase you wanna send some comments on my thoughts:-
b_venkatesh_54@yahoo.com
04/4/06, 1:36 AM |
Hi “Former CIO”
I was curious on who Mike Khanna is, I only read about Ramesh Vangal being the founder of Scandent with bunch of NRI investors but had not heard anything about this guy. Who is he and what’s his history?
I have not read anything negative about Ramesh Vangal either so what’s the scoop on him
08/24/06, 8:30 PM |
Pl read this! It gets deeper!
http://fecolumnists.expressindia.com/full_column.php?content_id=117407
08/24/06, 8:34 PM |
Pl read this! May be you will have a change of heart!
http://fecolumnists.expressindia.com/full_column.php?content_id=117407
10/4/06, 3:52 AM |
Just to add another bit from Economic Times (4th October). Pawan Kumar has also quit Scandent/Cambridge Solutions.
10/25/06, 9:58 PM |
the following message is seen on the website of vmoksha
25th October 2006
We Vmoksha Technologies shareholders and directors confirm that we did not open any account with the State Bank of Mauritius - Mauritius and no Board Meeting was ever held by us on 28th June 2005.
The “Fraudulent Account “ Opened and loan granted for an amount of US$ 13.5 Million (Approximately Rs. 62 Crores) by State Bank of Mauritius – Mumbai/Mauritius is also without shareholders and directors knowledge as confirmed above by our Company Secretary and Administrator M/S International Financial Services Mauritius. A legal action is contemplated against the State Bank of Mauritius and others. We are also contemplating for a request for inspection of documents held with the State Bank of Mauritius as the loan applied for was with the alleged forged resolution document reading inter alia as under:
It was resolved that:
(a) the company avails itself from State Bank of Mauritius Ltd. of Port Louis, a short term Loan of USD 13.5 m against:
Personal Guarantee of Mr. V. Ramachandiran (chairman) and Mr. GK Muralisrishna, MD of Helios and Matheson Information Technology Ltd.
Lien letter for pledge of proceeds by Helios and Matheson Information Technology Ltd.
The account was opened :
Without – Any – Account Opening Form Duly Signed by all directors and
authorized Signatories
Without – Any - Signature Card – Duly Signed by all Directors and Authorised
Signatories
Without – Any - Duly Signed and certified Memorandum and Articles of
Association
Without – Any – Board Approval
Without – Any - Board Resolution Duly Signed by all directors/Company
Secretary
Without– Any- Knowledge of the Company Secretary / Administrator of the
Company
Without – Any – Passport copies and Photographs – Duly signed and certified by /and of all the directors / authorized signatory
Without – Any – Knowledge about our company / Vmoksha’s Financials ie:-
Last three years Balance Sheets duly signed and certified by all
the Directors /Authorised Signatory.
Without – Any – Address Proof of the Company and its Directors and
Authorised Signatory.
Without – Any- Copy of Incorporation and commencement Certificate- Duly
signed and certified by all directories / Authorised Signatories.
Without - Any - Introduction from our existing banker of Vmoksha which is HSBC Mauritius
Without - Any - Initial / Minimum Deposit
Without - Any - Signature Verification of all the Authorised Signatories from VMoksha’s existing bankers HSBC Mauritius.
NO “KNOW YOUR CUSTOMER” as well as NO “DUE DILIGENCE” norms were followed.
A two-member bench of the Madras High Court comprising Hon’ble Chief Justice Mr. A P Shah and Hon’ble Justice Mr. D Murugesan has since ordered (the judgement of the Court was delivered by the Hon’ble Chief Justice) The order are inter alia as follows :
The impungned order of the learned single Judge is set aside.
The first respondent M/S Helios and Matheson Information Technology Ltd. agrees not to show Vmoksha group of companies as their companies on their website or otherwise.
Following press report came in the Hindu business line.
vMoksha seeks compensation from Helios and Matheson
Our Bureau
Chennai , Oct. 12
vMoksha Technologies Ltd has claimed a compensation of Rs 50 crore from the Chennai-based Helios and Matheson for not fulfilling the obligation of merger between the two in 120 days as per the Sales Purchase Agreement dated May 11, 2005.
The Bangalore-based IT company has also claimed a compensation of Rs 200 crore “towards loss, hardship and mental agony suffered on account of acts of omission and commission by Helios and Matheson,” according to a vMoksha statement.
The statement, featured in the company’s Web site, also carries a copy of the letter sent on July 6, 2005 to Mr Rajeev Sawhney, vMoksha founder, by Akshar Maherally/Prema Joysuree, Secretary and Administrator, International Financial Service, a management company incorporated in Mauritius.
The letter says, “As requested, please find attached the advice slip received from State Bank of Mauritius Ltd for the funds transfer to Helios & Matheson Information. As mentioned, we are completely unaware how this transaction went through and when the company opened a bank account with State Bank of Mauritius Ltd, without a board resolution.”
It may be recalled Helios acquired vMoksha in April 2005 for $19 million. After that, the transaction ran into rough weather with Helios claiming that Mr Rajeev Sawhney was against the completion of the deal.
In February, the Madras High Court passed an interim injunction restraining Mr Pawan Kumar, co-promoter of vMoksha, from carrying on any business or taking up any new employment or continuing in any other employment.
It also restrained Mr Sawhney, his associates and nominees from functioning as the Chairman and/or Chief Executive Officer or from altering the managerial structure and functioning of vMoksha.
A two-member Bench of the High Court comprising Chief Justice Mr A.P. Shah and Justice Mr D. Murugesan ordered that pending arbitration all the vMoksha shares would continue to be with the escrow agents, PricewaterhouseCoopers and Khaitan & Co.
11/2/06, 2:44 PM |
Oh. what a rosy picture Venkatesh has carved, sounds so much like his ex accountant which he took with him to Scandent … who Pavan would give The extra perks……to do all the wrong things. That is how you can buy people to talk in your favour.
Pavan is a known jugad master, ran vmoksha as his kingdom with his loyal slaves around him - all family and friends from his remote hometown in UP. Learnt all the wrong business ethics from DSQ and applied in Vmoksha drained the co., make all wrong investments. It wasn’t his money anyway 100% invester Rajeev Sahney. Was not answerable to any questions. What a sigh of relief he is gone from vmoksha .
His next move Scandent.. where he was asked to leave but they showed he resigned.
Now we hear he has caught hold of another investor in Mumbai.
11/3/06, 11:12 AM |
Yes Ankitha I heard that too he has caught another fish. Did you hear that pavan, his sons, his loyal accountant all had warrants against them for check bouncing issued to Digital Waves a computer company in bangalore from whom they rented computers for jadoo works. they had to get bail. there is record of it in bangalore courts.
11/3/06, 11:14 AM |
Yes Ankitha I heard that too he has caught another fish. Did you hear that pavan, his sons, his loyal accountant all had warrants against them for check bouncing issued to Digital Waves a computer company in bangalore from whom they rented computers for jadoo works. they had to get bail. there is record of it in bangalore courts.
11/8/06, 6:44 PM |
This is not doing good to the helios stock which is taking a beating presently. they better come to some resolution soon and close the Vmoksha issue
01/29/07, 12:49 PM |
Interesting read …..big honchos involved!
State Bank of Mauritius / Helios and Matheson / Pavan Kumar, ex CEO of VMoksha (was he the ex Pan IIT chairman as well - gave some conference about Business Ethics!!!)
Sucheta Dalal
29th January, 2007 (Indian Express - Mumbai/New Delhi)
Mystery sale
For over a year now, Rajeev Sawhney, the non-resident Indian financier of Vmoksha Technologies has been knocking the doors of every regulator to establish gross irregularities in a deal to sell vMoksha to Helios & Matheson (H & M) Information Technology. He alleges that Pawan Kumar, his partner and chief of Indian operations surreptitiously opened an account with State Bank of Mauritius in the name of Vmoksha Technologies. The bank in turn opened this account with Pawan Kumar’s signature alone and also lent it $13.5 million (on 28th June 2005) that was swifly transferred to H & M. Sawhney says, if H & M bought vMoksha at $ 19 million, why was vMoksha transferring $13.5 million to it? Sawhney’s complaints to the two national bourses and the market regulator have been ignored.
But a criminal complaint filed with the Metropolitan magistrate’s court in Mumbai was admitted on 19January and summons issued to State Bank of Mauritius officials, H & M and Pawan Kumar. This may finally solve the mystery of the alleged sale of vMoksha to H & M before another litigation filed at Chennai winds its way through the legal system.
04/10/07, 8:40 PM |
now pawan kumar is on the mentor council of Mentor partners. wonder what he is mentoring? have read a lot of interesting stuff about him on the IIT group site. let us watch his next move.
05/14/08, 2:18 PM |
Guys
Just see the news in
http://www.mauritius-vmoksha.com/news.htm
As of today Rajeev Sawhney is behind bars. He was arrested a few days ago ( 12th May 2008).The news was splashed in Deccan herald in bangalore.