One day in the end of April, a senior executive of Intiqua, an eVentures (think Softbank and Rupert Murdoch) funded, Singapore-based software services company, took a flight out of Delhi, changed planes in Mumbai and then left the country altogether. This was no ordinary business trip: the executive left in his wake a trail of outraged creditors-vendors, employees, and shareholders; the company's total liabilities are estimated to be in the region of $3 million (Rs 14.1 crore)-some of whom were scheduled to meet him in Delhi. By the time the exec left, it later emerged, Intiqua had wound up its operations in Delhi.

In other parts of the world where Intiqua operates, things aren't any better. In Singapore, the company has been served legal notices by vendors including Apar Infotech (Satyam Computer Services is also among the creditors) and by a former employee, Ron Mathers, for non-payment of dues. And some of its key shareholders are challenging the validity of the merger that resulted in its creation nearly one-and-a-half years ago. One shareholder has served the company a liquidation notice.

Two years ago, Intiqua seemed to have everything going for it. A bluechip VC fund, founders with an impeccable track record (CEO Dilip Keshu had been Vice President for BaaN's Asia Pacific operations, President Andrew Shields, Vice President, Software, Worldwide Strategic Sales at IBM), and a representation of hoary investors, the Singapore based Comcraft Group included. Intiqua was formed by the merger of Delhi-based software company NetAcross OLS (promoted by the Modipon Group's Manish Modi) and Singapore-based xchange21. Both companies had been funded by eVentures which held about 25 percent in NetAcross and about 30 percent in xchange21 and was keen to consolidate its investments. Post-merger eVentures holds about 26 per cent in Intiqua (with a total investment of about $9 million in the merged entity), NetAcross OLS holds 20 per cent, and the Singapore based Comcraft group, 12 per cent.

Some shareholders now claim the much-touted merger (where Xchange21 acquired NetAcross OLS and renamed itself) never really went through and this serves as the basis for the liquidation-and other legal-notices. They claim not to have received any money following the part-cash, part-stock deal. "It amounts to inducement if a company enters into a deal to buy another company which is doing $8 million of revenue and then doesn't pay up a single dollar, doesn't it?" asks one angry shareholder.

"We got RBI clearance (for the merger) in January 2002. We are working through the paperwork of our subsidiaries but this is also expected to be completed soon" explains Dilip Keshu, CEO, Intiqua.

Still, it isn't just shareholders who are upset. One employee claims that part of the regular salary reimbursements to all employees were stopped about a year ago. About 80 employees based in Delhi were asked to leave in April and the final financial settlement in most cases is pending. And some employees allege that while they were forced to accept a cut in pay last year, the company's senior executives "gave themselves a hike" this year. "They always seemed like a very top heavy company to me" adds a software vendor who interacted closely with the company. "The outgo to the top management did not seem justified given the size of the business."

There's more. Senior executives who spoke to Business Today on the condition of anonymity reveal that the company had actually adopted the practice of routinely restating its revenues for the previous month at monthly board meetings.

The company is believed to have done revenues of about $13 million (Rs 61.1 crore) until June 2002, and made a net loss of about $1.5 million (Rs 7.05 crore). "There have been times when there was as much as a 20 percent variance in the restated revenues on a monthly basis" says one former senior executive.

"We have clean audited accounts and have not restated our accounts. We have had one large hit in February 2002 when one of our bigger clients filed for bankruptcy. Our exposure was in the region of $500,000-this is the only case where we have restated our revenue projections in a significant manner" defends Keshu. BT also learns that Intiqua's revenue run rate for 2003 is around $8 million (Rs 37.6 crore), down about $5 million from last year.

"They were obviously going through some severe cash flow problems triggered by the bankruptcy declaration by some of their major clients like Imperative and The Scientific World" says a close company associate. "We are working on a payment plan and want to fix the liabilities as soon as possible" says Andrew Shields, President.

The Intiqua management blames the state of affairs on a "bearish market." While its story can be written off as yet another failed startup, there is one crucial difference. The market for software services is far from bearish. Business is still pouring in. Eventually, the Intiqua story boils down to one of management gone severely wrong with little apparent corrective action over the past year. The member representing eVentures on the company's board declined to comment on the entire issue. Still, his company's $9 million investment is probably worth a lot less now.

-Priya Srinivasan