Within a week of KPMG submitting a forensic report on its corporate governance procedures, Arvind Rao, founder, CEO & Managing Director of OnMobile, India’s pioneering and largest provider of mobile value added services, has resigned.
After a board meeting which ended late this evening, a statement issued by the company said Rao put in his papers after a special review by the company “identified weaknesses in some processes.”
“Recognising that these weaknesses took place during his tenure, Rao submitted his resignation with immediate effect and the board has accepted the same," the statement said. The review of the governance procedures was done by OnMobile’s legal advisors, Amarchand Mangaldas & Suresh A. Shroff, supported by KPMG.
While the review identified the weaknesses, strong alternate controls have ensured that the company did not suffer any loss, the statement added, without clarifying what these weaknesses were.
Meanwhile, according to a statement on the Bombay Stock Exchange, the pledged shares of the promoters of OnMobile -- Arvind Rao, Arvind Mohan Rao, Riffmobile Pvt Ltd, Oskar Habitat, Radha J, Jankiraman V, J Ramesh and J Chandramouli-- have been invoked and hence their holding in the company is nil.
The company announced that Mouli Raman, co-founder and executive director of the company, has been given the interim role of MD while a search for a new CEO has been initiated. Attempts made to reach Rao were not successful.