The ongoing tussle between Snapdeal’s founders and SoftBank, one of the major investors in the firm has caught everyone’s attention and now the founders of others firms where SoftBank has invested are running to courts to protect themselves from a Snapdeal like situation.
SoftBank is pushing for a possible merger between ecommerce majors Flipkart and Snapdeal as it feels that its investment in Snapdeal is not yielding desired results. In November 2016, SoftBank had written off as much as US$555 million in Ola and Snapdeal.
Now, in order to avoid similar fate as that of Snapdeal’s, Ola has made significant changes in its shareholder terms, strengthening the rights of its founders and restricting those of its large investors. According to the latest articles of association (AoA) filed by Ola’s holding company ANI Technologies Pvt Ltd, Ola will issue additional shares to co-founders Bhavish Aggarwal and Ankit Bhati to keep their composite shareholding in the company at between 10.9% and 12.38%.
After this move, SoftBank will not be able to buy more equity shares in Ola without approval from the company’s founders and board of directors. This is a bold move from Ola’s founders to protect their interests from shareholders and is one of the first of its kind in the Indian startup space.