eMudhra (EMUDHRA) Investor update summary

Background and context

• The company was originally a wholly owned subsidiary of 3i Infotech, promoted while the speaker was managing director there until 2012.

• In 2010, the board decided to hive off the subsidiary, which was acquired by Indus Innovest, promoted by Ravi Jagannathan.

• The speaker became non-executive chairman post-acquisition and only took over active management in 2014 after a business bifurcation.

• The allegations pertain to events approximately fifteen years old, with none of the relevant management still at 3i Infotech Limited.

Allegations and responses

• 3i Infotech Limited has alleged financial fraud, breach of trust, cheating, and conspiracy related to the disinvestment of 3i Consumer Services Limited and redemption of preference shares, with a claimed impact exceeding ₹128 crores plus interest and damages.

• Allegation 1: The 2010 sale of the subsidiary was at an undervalued price, with claims of fraud and lack of board disclosure.

• The sale was based on a Deloitte valuation report, with the divestment price exceeding the valuation.

• The board at the time included eminent, independent members, and all procedures were followed.

• Allegation 2: Claims of conflict of interest in the transaction, which the speaker denies, citing no ownership or relationship with Indus Innovest at the time.

Preferred share redemption details

• Upon hive-off, INR 25 crore in preference shares were to be redeemed by 2015, but the company lacked profits to do so.

• A negotiated agreement allowed staged redemption, with specific triggers and deadlines, including IPO or share sale events.

• The first trigger occurred in 2017, leading to redemption and return of preference shares, with all filings completed.