Help a woman entrepreneur recover her dues from willful defaulters.
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To April 02, 2017
The Honourable Prime Minister of India
South Block Raisina Hill
Honourable Prime Minister Narendra Modiji
Greetings from Chennai
I am Radha Shekhar, the proprietor of Jigsaw Solutions, a small advertising agency from Chennai, of which my son is the Operations Manager. My agency has been servicing a host of clients from established business houses like Kotak Mahindra Bank to online start ups like India Property, Bank Bazaar, Zoom Car and Stayzilla.
As a small player we are heavily dependent on timely payments of our bills by our clients, since we in turn have to pay our vendors. We have had no issues with most of our clients, who have cleared their dues in time, barring the last mentioned in the list – Stayzilla – an online hotel and home stay booking company.
For more than a year since January 2016 Stayzilla had been dodging payments totaling Rs.1.69 crores after we carried out ad campaigns for them through airline boarding passes and outdoor billboards. Our repeated efforts to clear the dues were met with evasion, stonewalling and on a couple of occasions plain threats. Despite getting a fresh round of funding of USD 13 million in March 2016 Stayzilla resisted paying our dues.
Once they shut down the company on February 23rd without clearing our dues, we had no option but to file a complaint of cheating, against the two founder promoters of Stayzilla There was no prior intimation about the closure to creditors like us, just a rambling blog post on their website about their failed business model, which in turn was reported by the mainstream media. The two promoters also went underground.
After a probe and finding our complaint to be prima facie genuine the Central Crime Branch of Chennai Police arrested Yogendra Vasupal, MD of Stayzilla and remanded him to custody. His CFO Sachit Singhi continues to abscond to this day. Two courts have so far denied bail to Vasupal.
We were surprised and even shocked when the entire start up community ganged up to wrongly paint this action as a threat to the entire start up industry in the country. We had only sought action against one start up that had cheated us after showing no intent to pay our bills. The closure of the company was further proof that they wanted to escape all their liabilities. They had similarly cheated CouponDuniya, another start up and their landlord without paying rent. Also hundreds of customers who had booked hotel rooms through Stayzilla have been denied their refunds after their bookings were not honoured.
Faced with a concerted outcry in support of a defaulter, we had to reach out to the media to explain our side of the story. The Karnataka IT Minister Mr. Priyank Kharge also told PTI that one sided support to Stayzilla founder would be akin to supporting a defaulter like Vijay Mallaya.
While there is no disputing that start ups promote innovation and entrepreneurship, let it not be lost that my company too is a startup – without the glamour associated with the tech startups that also get funded by venture capitalists. I run my business out of my own money and if we default on this payment to our vendors, we stand to lose heavily and even the flat we live in might have to be sold to pay our dues. We belong to a middle class family and subsist mostly on the earnings of my husband, who has been a journalist for over three decades.
In the clamour for supporting start ups as part of India’s self-sufficiency drive, small vendors like us, who also play a crucial role in the ecosystem of start ups by getting them much needed visibility, should not get short changed.
What Stayzilla has done is nothing but an unethical business practice which should be strongly discouraged instead of letting them take cover behind the start up ecosystem. Otherwise such blind support to a fraudulent company would totally undermine the trust in start ups, even as many of them are folding up due to poor business practices and mindless spending. For example why did Stayzilla shut down in spite of receiving funding to the tune of USD13 million less than a year ago?
We request your government to ensure that our start up industry is genuinely funded, follows healthy and transparent business models and remains accountable to the entire ecosystem including small vendors like me. I request you and the ministries concerned to address these issues at the earliest so that women entrepreneurs like me do not suffer at the hands of a few unscrupulous businessmen posing as start ups.
Radha Shekhar Flat 14 Subham
Proprietor 77/31 4th Main Road
Jigsaw Solutions Gandhinagar, Adyar
CHENNAI 600 020
Union Home Minister
Union Finance Minister
Union IT and Communications Minister
Union Commerce Minister
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