TMW Fintech purchased goods from MCT Cards and Technology Pvt. Ltd, a Manipal-based provider of SIM cards and smart cards for biometric identification and payment facilitation.
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At a time India’s fintech sector is spawning unicorns, Mumbai-based wallet startup TMW Fintech Pvt. Ltd is facing liquidation, records from the National Company Law Tribunal (NCLT) showed.
TMW Fintech purchased goods from MCT Cards and Technology Pvt. Ltd, a Manipal-based provider of SIM cards and smart cards for biometric identification and payment facilitation. In 2019, MCT Cards took TWM Fintech to NCLT for defaulting on repayments over ₹38 lakh and pressed for its liquidation.
“The operational creditor (MCT Cards) had issued various invoices against the corporate debtor (TMW Fintech). The total amount of the invoices raised between October 2018 and August 2019 is ₹83.36 lakh," an NCLT order dated 8 October said. Of this, TMW paid ₹45 lakh but failed to pay the rest, the order said. “It is clear that despite repeated assurance given by the debtor to the creditor, the debtor is unable to pay its operational debt and therefore liable to be wound up/liquidated in accordance with the law."
Pramod Dattaram Rasam has been hired as the interim resolution professional to manage the insolvency process.
TMW Fintech, formerly called The Mobile Wallet Pvt. Ltd, was founded in 2015 by second-generation entrepreneur Vinay Kalantri as his third venture. Last May, Kalantri founded a fourth firm called Que Processing Services. Vinay’s father, Vijay G. Kalantri, chairman and managing director of Balaji Infra Projects Ltd, too, found himself in bankruptcy courts earlier, with one of his promoted firms, Dighi Port, going into bankruptcy. The port was acquired by Adani Ports and Special Economic Zone Ltd early this year.
TMW Fintech has no publicly declared external funding and offered a wallet-linked prepaid card powered by global payments firm Mastercard.
TMW Fintech was doing well till even three years ago. In early 2018, it acquired Gurugram-based Protinus Infotech Pvt. Ltd, which operates the payment platform Trupay. Trupay was backed by Mumbai-based early-stage investor Kae Capital and M&S Partners Pte Ltd, a Singapore-based venture capital firm that invests in early-stage Southeast Asian companies.
A year later, TMW Fintech collaborated with Reliance Infrastructure Ltd’s Mumbai Metro One, launching a 2-in-1 travel Metro smart card. However, the mobile wallet firm has not been active for some time now.
TMW Fintech could not be reached for a comment. Email sent to MCT Cards and the resolution professional remained unanswered till press time.
This is the second instance where a fintech firm has been referred to bankruptcy courts. Last year, Kalaari Capital-backed Rubique Technologies India was admitted to NCLT by another Mumbai bench on a plea by its former employee. Calls to Manav Jeet, founder, managing director and chief executive of Rubique Technologies, went unanswered.
Meanwhile, a person familiar with the development said more claims against TMW Fintech had been filed, and MCT Cards is hopeful of a resolution under the IBC process.
The insolvency tribunal has ordered that “the supply of essential goods or services to the corporate debtor, if continuing, shall not be terminated or suspended or interrupted during moratorium period".
Kalantri's team reached out to VCCircle with an update that Kalantri resigned as the CEO and Director of the company on 12 March, 2020 but continues to hold a minority stake of 3.5% in TMW Fintech.
The company's other shareholders include Imperial Holdings Ltd, an Essar group's promoter related firm, which holds 74% in the wallet company, while the balance are held in the form of employees ESOPs.
"Our company ran out of cash to run the operations and investors were unwilling to put in more money because of low minority shareholding in the company and the money guzzling business of the fintech business," Kalantri told over the phone.
Kalantri said TMW Fintech offered to repay 30-40% of the balance dues ( ₹38 lakh) but the firm refused to consider the settlement offer. This has also led to the inability to dissolve the company without repayment of the liabilities. Kalantri confirmed that the dues owed to MCT was the only remaining liability of TMW Fintech.
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