On 27 September, a group of 20 vendors of Homeshop18, the eponymous 24-hour teleshopping channel and e-commerce portal, held a press conference to accuse the company of fraud. Representatives of the association claimed that over two hundred vendors were owed dues ranging from “Rs 150 crore to Rs 200 crore.” The vendors first began agitating in late June, a few weeks after Homeshop18’s ownership changed hands from Network18 Media & Investments Limited, a firm owned by Mukesh Ambani’s Reliance Group, to an entity named Skyblue Buildwell Private Limited. The association said that Homeshop18, which they claimed was valued at Rs 305 crore in the financial year 2018, had been taken over by a “shell” company in a fraudulent move. The Caravan accessed the annual returns that Skyblue Buildwell filed with the ministry of corporate affairs, for the same financial year. In these, the company had listed its net worth as Rs 7.57 lakh. The Caravan had earlier reported that Skyblue Buildwell is connected to Mahendra Nahata, a close business associate of Ambani.
The vendors’ predicament began on 6 June when they were first apprised of the takeover. Rajesh Sachdeva, the chief executive officer of Cosmetics World, a small enterprise manufacturing beauty products, told me that he received a press release on WhatsApp from his liaison at HomeShop18. It was a copy of an exchange filing that TV18 Home Shopping Network Limited—a subsidiary of Network18 and the company that owns the brand name HomeShop18—sent to the National Stock Exchange and the Bombay Stock Exchange, after market hours. It read:
TV18 Home Shopping Network Ltd (‘HomeShop18’) has raised a fresh round of funding from ‘Skyblue Buildwell Private Limited’ (‘Skyblue’), a new investor. The existing shareholders (namely: Network18 Media & Investments, SAIF Partners, GS Home Shopping South Korea, OCP Asia, CJO Shopping Co. Ltd and Providence Equity Partners) have not participated in this round. After the investment, Skyblue holds 82.64% of HomeShop18, becoming the holding company and promoter of HomeShop18. With this investment, HomeShop18 has ceased to be a subsidiary of NW18 HSN Holdings Plc and an associate of Network18 Media & Investments Limited. Accordingly, the Company is in the process of changing its corporate as well as brand name.
Himanshu Khattar, the owner of another cosmetics company called S.S. Cosmetics, received the same press release while in his factory in Bawana, an industrial area in Delhi’s northern outskirts. The first reaction of both the men, who are brothers-in-law, was relief. Sachdeva told me they thought, “Finally, we will start receiving our pending dues. How were we to know that it was a continuation of the ordeal we had been suffering for the past three to four months?”
Khattar said that Homeshop18 first started defaulting on its payments to vendors around February or March, though an investigation published by ET Prime in late June quotes vendors who had dues pending from December 2018. Khattar claims that he is owed dues from April to September amounting to around Rs 1.5 crore, while Sachdeva said he is owed Rs 50 lakh. Girish Gupta, a vendor from Panipat who supplied home furnishings, said he is yet to get Rs 2.8 crore from the company. In April, when the vendors inquired individually about pending dues, the firm’s management told them that there were temporary cash flow problems and the matter would be sorted out soon. Girish said, “We thought that since it is Mukesh Ambani’s company we will get our payments. The Ambani name has a lot of goodwill.” The vendors even appealed to Ambani and the prime minister Narendra Modi at the press conference, which was dotted with posters exhorting the two to intervene and help them get their dues.