The Indian eCommerce segment is currently witnessing a lots of happenings. Earlier, Snapdeal backed off from the acquisition talks with Flipkart after spending months chasing the deal.
That was followed by a massive $2.5 billion funding round raised by Flipkart from SoftBank Vision Fund, which holds majority stake in Snapdeal. Now, the employees of Snapdeal have decided to protest by writing a joint letter to co-founders, Kunal Bahl and Rohit Bansal.
The employees — both former and current — have also sent copies of the letter to Prime Minister’s Office, Ministry of Finance and Governor of the Reserve Bank of India.
In a letter dated August 3rd, reviewed by Moneycontrol, the employees allege that the Plan B or Snapdeal 2.0 plan is not viable and would only keep the founders in-charge at the cost of a large number of employees.
In the letter, the employees seem to be unhappy about the founders’ 2.0 plan. “It is a poisonous plan to destroy the organisation so that you stay in charge. So many people to be impacted for the sake of just two of you,” the letter reads.
For those who are unaware, after Snapdeal denied the acquisition offer from Flipkart, the company said that it will continue to work independently. To do so, the company has decided to layoff 80% of its employees, as per the several media reports.
“An independent inquiry into the affairs of this company would reveal how the interests of employees and possibly shareholders were destroyed to protect the interest of two people,” read the letter. It further adds, “we saw a proud unicorn change into a troubled company. But we kept the faith and believed what you said – the employees of this organization are your ‘single biggest priority’.”
The letter has also been marked to the managing director of Axis Bank, among at least a dozen other recipients. Notably, last month, Axis Bank announced the acquisition of Snapdeal’s online payments firm Freecharge in an all cash deal for Rs 385 crore.
Snapdeal has responded to the allegations in the letter. The company’s spokesperson said:
The board has made no decision with regard to the team composition for Snapdeal 2.0. The company cannot comment on baseless, unsubstantiated allegations made by unidentified sources.
As per the report from Reuters, while the board of Jasper Infotech — parent company of Snapdeal, had approved Flipkart’s second offer of around $950 million, the deal was awaiting an approval of smaller shareholders, which never came. Reportedly, the shareholders weren’t happy with the term sheet furnished by Flipkart as it was laced with a lot of ‘hold backs’ and ‘clauses.’