14 Aug 2019

Living Consumer files insolvency petition against RummyCircle

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Exclusive Digital and affiliate marketing company Living Consumer Products Private Limited has filed an insolvency petition against online rummy website RummyCircle’s parent company Play Games24x7 Private Limited for alleged non-payment of pending dues.

Living Consumer Products, as an operational creditor, has filed the petition in the Mumbai bench of the National Company Law Tribunal initiating corporate insolvency process against Play Games24x7 for non-payment of dues for goods/services under Section 9 of the Insolvency and Bankruptcy Code, 2016.

The matter came up for hearing on 5th August, 2019 and the NCLT Bench asked Play Games24x7 to file its reply to Living Consumer’s claim by the next day, i.e. 6th August post which a rejoinder could be filed by Living Consumer Products.

The matter has now been listed for further hearing on 11th September, 2019 after all the replies have been filed.

Amit Vora, Director of Living Consumer Products declined to comment on the matter and stated, “As the matter is subjudice, I reserve my comments on this topic.”

Bhavin Pandya, CEO and co-founder of Play Games24x7 while declining to comment on the litigation alluded to the need to curb affiliate marketing fraud.

In an emailed statement he noted, “The affiliate marketing industry in India is rapidly evolving. With the increasing migration of services to the online medium, it is imperative that the online affiliate marketing industry also follows high standards and responsible business practices. One of the challenges faced by advertisers is affiliate fraud at all scales by some small or big online marketing affiliates.

This is not a new problem however in the more mature affiliate marketing industry in the West, both parties, the advertisers and the affiliates have understood the value of working with their interests aligned and therefore are naturally moving towards revenue sharing arrangements. This industry being new in India, these models are yet to evolve on the backdrop or more transparency and willingness to share data between stakeholders.

At RummyCircle and My11Circle, we are constantly improving our systems by running real time data science models to detect affiliate marketing fraud. The Company has also faced issues of misreported acquisition data and is able to now substantiate, with its own data, and take quick corrective action to mitigate losses and clean up the practices at the end of the affiliates. It is not surprising that some operators who look at short term gains, resist the idea of transparency for short term business objectives, however, this is not good for the health of the online marketing industry and eventually will destroy creativity and competition.

Given where the industry is right now, accountability of reporting relevant user information to detect fraud is a challenge due to lack of proper information sharing by the affiliates. The Company however is committed to use technology and data science to improve this industry and hopes that these steps help every stakeholder in the long run. The Company cannot comment on the specifics of a dispute with any vendor that is pending adjudication and it is appropriate to await the outcome of the adjudication process.”

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