OnMobile Global has decided to appoint two different persons for the positions of Managing Director (MD) and Chief Executive Officer (CEO), thereby splitting both the positions, reports Business Standard. OnMobile says that it has appointed the company’s co-founder and Executive Director Mouli Raman as its MD, while it is still on the look out for a new CEO.
This development essentially means that Mouli Raman is no longer the Interim MD after he took over that position in July 2012, following the resignation of OnMobile CEO & MD Arvind Rao and and one of the company’s promoters. Raman said that the decision to split the positions and hire two different executives was taken by the company board with OnMobile’s best interests in mind, as indicated by the report.
Resignation of OnMobile CEO & MD Arvind Rao: OnMobile CEO & MD Arvind Rao and one of the company’s promoters had resigned in July 2012, at the same time when the company acknowledged a special review completed by its legal advisors, Amarchand Mangaldas & Suresh A. Shroff, Advocates, duly supported by KPMG, who had identified “weaknesses in some processes”. While the company didn’t clarify what these weaknesses were, but it informed that it has taken steps to rectify these weaknesses.
Prior to this, OnMobile Global had also denied media reports that a probe was ordered on Rao by the company’s board of directors, on account of misappropriation of funds and an enquiry was being conducted by an external auditor for it. The company had stated these reports as baseless rumors and allegations, which are devoid of factual accuracy.
OnMobile Financials: OnMobile Global reported consolidated profits of Rs 9.52 crore for the quarter ended 30th June 2012, down 25.5% year on year but almost double the profit from the previous quarter. It posted a total revenue of Rs 185.21 crore, up 4.13% quarter-on-quarter and 35.7% year-on-year.
Findings of the Special Review: The company also elaborated on its findings from the special review conducted by its legal advisors. It noted that the company came across three transactions that had been initiated under the advice of Arvind Rao which “did not have adequate business justification”, with one of these transactions being with an entity related to Rao. However the review did not establish any evidence of commission of any embezzlement or other offences by Rao or other employees of the Company.
It also noted that it had cancelled all the transactions that were reviewed as part of this special review and terminated all the contracts for these transactions with no payments made for contracts executed with the entity related to the ex-CEO Rao.
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