EbixCash directors leave a month after parent’s bankruptcy proceedings

Ripple Effect: Two directors of fintech platform EbixCash are headed out, a month after Ebix Inc., filed for bankruptcy.

The company in December had issued a clarification on the Chapter 11 filing in Texas, US saying its operations in India will not be affected.

According to data quoted from the Ministry of Corporate Affairs, Uma Shankar and SP Kothari resigned within a fortnight, as per reports.

Shankar, who joined the company as an independent director in January 2022, is also an additional director for Karnataka Bank and serves on the board of IDBI Capital Markets & Securities, as well as Export Credit and Guarantee Corporation of India. 

The Reserve Bank of India veteran is a former executive director for banking supervision, spending close to four decades in the organisation.

Kothari on the other hand, who joined a year earlier than Shankar in 2021, ceased to be a director of the company shortly after.

He is a Gordon Y Billard Professor of Accounting and Finance in the MIT Sloan School of Management for close to 25 years, and former Chief Economist and Director at the Division of Economic and Risk Analysis at US Securities and Exchange Commission.

The company had received clearance for public offering in India after the Security Exchange Board of India (SEBI) gave a nod for the IPO in April 2023.

The listing process has still not begun, which looms further doubt on its listing in India.

The company had claimed that its future remains “bright,” and operations will ensue as before shortly after the bankruptcy proceedings began last month.

“Ebix subsidiaries will continue to operate normally. EbixCash companies in India, besides all international subsidiaries and their franchisees around the world are not included in the Chapter 11 filing,” the company stated.

All worldwide operations of the Company will continue to operate in the ordinary course and without any interruption, it added.

The bankruptcy was a result of a debt of $360 million in principal amount, which had to be cleared on December 17. The company had sought multiple extensions to replay its dues, post which bankruptcy proceedings began by December 19 after the Chapter 11 filing.

Ebix was aggressively tapping public markets for capital, with their Indian arm EbixCash filing for its draft red herring prospectus (DRHP) with the SEBI in early 2022 for a Rs 6,000 crore IPO.