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Business News/ Companies / News/  Affle Global claims victory in IndusOS lawsuit, PhonePe refutes
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Affle Global claims victory in IndusOS lawsuit, PhonePe refutes

Breaking its long silence on the issue, AGPL said that on May 31, 2021, the company won the Singapore Court orders invalidating resolutions related to PhonePe’s transactions and placed an injunction on any further transfer of shares of OSLabs

Earlier in May, it was reported that PhonePe was closing in on acquiring a 92% stake in IndusOS for an estimated $60 million.Premium
Earlier in May, it was reported that PhonePe was closing in on acquiring a 92% stake in IndusOS for an estimated $60 million.

Digital advertising platform, Affle Global Pte. Ltd. (AGPL) claims that it has won the arbitration case against digital payments company, PhonePe, after opposing the latter’s acquisition attempt of app discovery platform IndusOS, at the Singapore High Court (HC).

Breaking its long silence on the issue, AGPL in a statement on Sunday said that on May 31, 2021, the company won the Singapore Court orders invalidating resolutions related to PhonePe’s transactions and placed an injunction on any further transfer of shares of OSLabs Pte. Ltd., the parent of IndusOS to PhonePe.

The digital advertising platform currently holds a 23% stake in OSLabs. While PhonePe holds 32% in the entity, which was bought from earlier investors, including Omidyar Network, JSW Ventures, Micromax, among others.

Earlier in May, it was reported that PhonePe was closing in on acquiring a 92% stake in IndusOS for an estimated $60 million.

The same time, AGPL initiated Singapore HC proceedings to get further protection against invalid resolutions and to suspend PhonePe voting, while calling the term sheets signed between OSLabs and others on March 12, 2021, to be invalid.

“AGPL confirms that it values OSLabs at over $90 million valuation and is clearly not selling to PhonePe at $60 million. Founders and key shareholders of OSLabs are not allowed to sell 20% shares to PhonePe at $60 million without offering right of first refusal (ROFR) rights to AGPL. So, there is at least 45% of the alleged 92% acquisition ambition of PhonePe that it cannot purchase post the May 15, 2021 dated SIAC emergency arbitration order," said AGPL in a statement.

AGPL also claims that it also won the orders on June 18, that require extraordinary general meeting (EGM) to be held properly by OSLabs, wherein PhonePe will not be allowed to vote as their shares were registered without proper resolutions unless such transfers are validated by the Arbitration Tribunal.

AGPL has over 25% legal and beneficial voting rights in OSlabs. Other stakeholders in the app discovery platform include Samsung Ventures, which holds 20% stake, along with founders and key stakeholders which own another 20% stake in OSLabs.

PhonePe has strongly refuted these claims.

“The matter is sub-judice and no final finding has been given yet. Affle has invoked the provisions of section 184D of the Singapore Cos Act to hold an EGM and reneged on the Term Sheet. It is therefore opposing the written resolutions already passed and sought for an EGM, which relief has been allowed by the court. The outcome is the same as shareholders who have voted in the manner through a written resolution would do so again at an EGM as mere procedural compliance. We consider this as a tactic to delay the transaction of PhonePe and cause loss to OSLabs," said a PhonePe spokesperson.

PhonePe has also filed a case against Affle and Ventureast (another IndusOS investor) in the Singapore HC.

Responding to allegations pertaining to PhonePe buying shares of Omidyar, JSW Ventures, and others without proper resolution; the company hit back stating that Affle has signed the term sheet.

“These share transfers have taken place validly in conformity with the transaction as agreed to by the parties who signed the term sheet. Affle has also signed the term sheet and is reneging on the contract to sell, for motives which are not in the best interest of OSLabs," explained the PhonePe spokesperson.

Earlier this month, PhonePe filed a formal complaint with market regulator Securities and Exchange Board of India (SEBI), against Ventureast, alleging that the latter's "side dealings" with Affle are a "deliberate bad faith attempt" to scuttle PhonePe's majority acquisition in OSLabs.

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Published: 27 Jun 2021, 08:55 PM IST
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