There appears to be more trouble in store for instant messaging platform WhatsApp, which has been struggling to get its payments service off the ground in India.
Infibeam Avenues, the listed parent of e-commerce company Infibeam, has made a formal complaint to the country’s IT minister and capital markets regulator alleging that a rumour circulated on Facebook-owned WhatsApp was responsible for sending the company’s share price into freefall last week.
Infibeam shares were trading at Rs 180.35 apiece when the opening bell rang on Friday. It sharply declined as the day progressed before closing at Rs 57.90 on the NSE, more than 70% lower than the previous close.
A WhatsApp message was believed to be the trigger for the slide. Reportedly attributed to brokerage firm Equirus Securities, the message had alleged lapses in Infibeam’s corporate governance and accounting policies.
It claimed that Infibeam had lent money to one of its subsidiaries with negative net assets and further stated that the Ahmedabad-based company had classified its co-founder as a non-promoter.
Infibeam had issued clarifications on both counts in a bid to restore calm. Equirus separately denied its involvement.
The stock staged a slight recovery on Monday and closed the day at Rs 65.85, up 12.66% from Fridays close.
According to a report in The Economic Times, Infibeam officials met IT minister Ravi Shankar Prasad on Sunday to discuss the fallout.
“I wish to draw your kind attention that the country has been reeling under the rumours and misinformation which have been spread via WhatsApp platform across the country and there are enough recorded incidence to prove that how WhatsApp rumours has been disturbing our country’s social fabric and impacting as well as have created challenges for law & order situation in last few years,” Infibeam chief executive Vishal Mehta was quoted as stating in a letter to the ministry.
“I and my entire company team have worked very hard with integrity in past several years. But some unknown person/institution/ Group using the WhatsApp platform have attempted to tarnish my company, which has adversely impacted small retail investors of my Company, who have paid a heavy price in terms of erosion of share price,” he added.
The company also marked the letter to the Securities and Exchange Board of India (SEBI), asking the regulator to take necessary action.
Email queries sent to WhatsApp did not elicit a response till the time of publishing this report.
The controversy represents another setback for WhatsApp, which has already been under pressure from the government over the spread of fake news, among other issues.
Following a spate of mob lynching incidents triggered by rumours circulated on WhatsApp, IT minister Prasad had met the instant messenger’s chief executive Chris Daniels in August and asked him to take several remedial measures.
These included appointing a grievance officer to check lewd messages and inflammatory content. WhatsApp, which has more than 200 million users in India, made this appointment last week while also complying with earlier requests to publish advertisements to spread awareness.
The government had also asked WhatsApp to ensure traceability of messages being circulated at a mass level in an area at a particular time. It has since made a couple of tweaks on this platform in this regard.
Earlier, the fallout of the Cambridge Analytica imbroglio involving Facebook had delayed the rollout of WhatsApp’s payment service over data privacy concerns.