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As Net 4 buckles under bankruptcy proceedings, customers left with nobody to turn to

On September 7, Ruchit Kapadia couldn’t access his email. He was able to send emails, but not receive them. Kapadia works in Mumbai at his family’s garment export company, DKK Exports, and administers the bulk of his business through email. “My business has come to a standstill, because I can’t access my email,” he lamented. Since all his clients are based abroad, email is the only formal way he has of communicating with them. It’s the only way he can send invoices, take orders, and negotiate with buyers.

Upon investigating, he found out that his company’s lease over his business’s domain, dkkexports.com, had expired on August 13. 

“I didn’t receive any renewal notice [for the domain name], because the registered email ID is a VSNL email ID, and VSNL doesn’t exist anymore,” he said. But his registrar, that is, the website where he bought the domain name, automatically offered him some more time to make a renewal payment. So he paid. But the renewal never happened. 

So Kapadia called up Net 4’s customer care number, 011-45980000. He was not able to get through to a real person. So he tried to call up one of their offices. Nobody picked up. He tried Net 4’s multiple outposts over the phone — Delhi, Mumbai, Bangalore, Chennai, Pune and Kolkata. Nobody was picking up. In Delhi, the number itself was disconnected, Kapadia said. 

He sent some people to the Delhi office to see if he could get in touch with someone in person. The office was closed. He also sent someone to the Pune office, but it had apparently been shut for three years.

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Frustrated, he went on Twitter to voice his complaints. He wasn’t the only one. Many users on the site have been aghast at the prospect of losing access to their or their business’s online identity. One user tweeted, “When India is working virtually Net4 has disappeared illegally, putting thousands in misery in these hard times. Please let us transfer our domains.” 

Meanwhile, Naresh Gupta, a Noida-based startup executive at ANR Glocal, and his colleagues couldn’t access their email, which had a custom address with the domain name of the company, anrglocal.in. “First, I tried to call the customer care number, but it always came busy. Then I wrote an email to the customer care [corporatesupport@net4.in]. There was no response,” he said. Gupta wanted to downgrade his email plan since his inboxes didn’t need much storage, but an error prevented him from ending the expired plan, and no company representatives seemed online to take his call. 

“My email package then expired. I wanted to change the package, but they are not allowing it,” Gupta told us. “There is no link on their website where the initial package can be discontinued. We have been trying to get in touch with their customer support, but the line is always engaged.” 

To make matters worse, Net 4’s website was down briefly. After the site came back up, Gupta was able to move his email to a different service, even as his domain name remained registered with Net 4. 

Arjun Shah, an artist manager who runs the firm Shark & Ink in Mumbai, was not able to transfer his domain name (sharkandink.com) to a different registrar, complicating things for his business. “Because that transfer didn’t happen, my email server was down. If you don’t have email for a week, and someone gets an auto-response saying that the domain doesn’t exist, people assume the worst, that the company has shut down.” Like many other users, Shah was trying to transfer his domain because he was not able to renew it on Net 4.

MediaNama spoke to over half a dozen users who faced these issues and struggled to get in touch with Net 4. Twitter has seen a growing chorus of helpless domain holders tagging the IT Minister, the Prime Minister, TRAI, or anyone they think could help. Users, especially businesses, have been distraught at the prospect of losing access to their websites and email inboxes.

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Who is a domain registrar?

Domain registrars are companies that sell domain names like medianama.com. Many registrars also provide services like website hosting and email. Net 4 is a registrar that did this.

Net 4 customers are not able to reach any person within the company for support. We tried calling the company, but its phone lines are either disconnected or calls don’t connect to any human operator. It is unclear if the company is even operating with skeletal staff. Net 4’s website is up, but little else is visible.

Net 4’s financial troubles

Net 4 started life as an internet service provider in 1985 but transformed into a domain name registrar around the time internet businesses started cropping up around the world. At one point, the company was reportedly India’s largest registrar, with over 1 lakh generic Top Level Domains (like .com, .net, etc.) under management.

In 2011, it was a seemingly healthy business — profits had increased almost two-fold year over year, and the company had even completed a strategic acquisition. It had revenues well into the hundreds of crores with commensurate profits, and data centres and offices in six cities. It worked with companies like Verizon, British Telecom, DeBeers, and ITC.

But all that growth disappeared — starting in 2002, Net 4 started to borrow money from the State Bank of India and continued to do so over the years. By 2017, it was running losses. This was also around the time the company was associated with a large-scale Twitter hack, where it denied any responsibility.

In 2013, SBI declared Net 4 a Non-Performing Asset, and in the following year sold off its debt — worth over Rs 190 crore — to Edelweiss Asset Reconstruction. 

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The company has intermittently been in financial trouble since then. The same year SBI declared Net 4 an NPA, its founder and Managing Director Jasjit Singh Sawhney was arrested as the company did not pay the service tax it had collected from customers. Sawhney is no longer a director at the company and lives in the UK, according to one of his lawyers cited in an NCLT order.

In 2017, Net 4 reported a quarterly loss of Rs 4.22 crore. In the following year, it was delisted from the National Stock Exchange and the Bombay Stock Exchange. One former employee told MediaNama that the company was struggling to pay employees their wages on time as late as 2019, and that it had completely stopped paying out salaries amid the COVID-19 pandemic, with employees largely no longer showing up at work. 

Net 4’s insolvency proceedings started last March, and hearings in the matter are ongoing at the National Company Law Tribunal. In one judgement from March 2019, the NCLT appointed Vikram Bajaj, an insolvency expert registered with the Insolvency and Bankruptcy Board of India, as a “Resolution Professional” in the matter. On being contacted by MediaNama, Bajaj refused to comment on the situation.

According to Domain Incite, which first reported the insolvency proceedings in 2019, Net 4 had over 100,000 domain names under management as of February 2019.

A message on Net 4’s website warns customers of increased wait times on support calls, but only till August 15. It has been a month since that end date, and customers seem to be facing a company that may as well not exist rather than delays. None of the customers we spoke to reported ever getting in touch with someone who worked for Net 4 directly.

Vijayashankar Nagarajarao, a cyberlaw consultant who goes by the name Naavi, said in a blog post in July that ICANN and the Ministry of Electronics and Information Technology needed to step in to make sure customers weren’t locked out of their websites. He noted that this kind of situation, where Net 4’s customer support went silent and its systems stopped working as intended, already happened once in 2017.

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Net 4 did not return our request for comment.

ICANN and registrars

Registrars like Net 4 are accredited by the International Corporation for Assigned Names and Numbers. Many users are reaching out to ICANN’s India head, Samiran Gupta, for help on renewing their Net 4 purchases. According to multiple emails we obtained from customers, ICANN is referring users to file individual complaints:

With regard to Net4India, the company is in a legal dispute with several creditors. The matter was referred for insolvency proceedings at the National Company Law Tribunal in 2019. The tribunal appointed a resolution professional who is coordinating with ICANN on matters related to compliance of ICANN’s registrar agreement, including renewals and transfers of domain names. Since you are facing challenges in renewal or transfer of domain names, please use the Transfer Complaint form at this link and ICANN’s contractual compliance team will reach out to the resolution professional and try to assist you.

[Source: ICANN email to customers]

While ICANN coordinates systems internationally for namespaces and domain names, individual domain registries also have to license registrars. For example, the National Internet Exchange of India (NIXI) operates Registry.in, which authorises registrars to sell the .in and .bharat domain names. Last year, Net 4 was listed by NIXI as a “top-performing” registrar. As of writing, the company has been moved to the bottom of the “other performers” list. 

“ICANN did not anticipate the problem of a Registrar walking away leaving the customers in the lurch,” Naavi wrote earlier this year. “Now it is the responsibility of ICANN to sort out this issue. Otherwise, there could be legal action against the representative of ICANN in India,” he warned, referring to Gupta. 

While Domain Incite, which first reported Net 4’s insolvency process, reported that Net 4 has been “suspended”, we have reached out to ICANN for more information on what exactly is being done to protect users’ interests. 

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It is worth noting that ICANN’s master agreement with registrars entitles them to a termination of contract if a registrar has been tangled in insolvency proceedings for more than a month. But they don’t seem to have taken advantage of this clause. ICANN also says on its complaints page that it cannot intervene when complaints are made regarding country-specific domain names. We have sent a query to NIXI, which operates the .in registry, to find out if they are taking action on behalf of Net 4 customers.

Net 4’s website seems to be up, but many of its automated processes seem to be down, with no solution in sight except to wait for ICANN to respond to individual complaints. Several businesses could be affected in the meanwhile — the company claims to have thousands of businesses signed on, such as Airtel, CNBC TV18, Essar, and TCS. As more of these customers approach expiry dates for their services, the impact could grow. 

The situation may remain uncertain until Net 4’s financial troubles are cleared up. A so-called resolution plan is pending at the National Company Law Tribunal, whose principal bench said in an order that it would look at the plan only after considering a few more issues. The next hearing, in that case, is set for October 1.

Written By

I cover the digital content ecosystem and telecom for MediaNama.

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.



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