Eraaya Lifespaces -- which recently completed the acquisition of Ebix Inc., along with its global subsidiaries, for a total payment of Rs 1,273.25 crore – has ousted Ebix chairman Robin Raina from the company.

In a stock exchange filing, Eraaya said, "The Board was informed regarding certain financial irregularities committed by Mr. Robin Raina pertaining to operations of Ebix, Inc. and all its’ global subsidiaries, and as a measure of good corporate governance practice, the Eraaya Board unanimously decided to initiate investigation of the alleged financial irregularities, entrusted the task to high-powered steering committee, and suspended Mr. Robin Raina as chairman cum director of Eraaya, director and CEO of Ebix, Inc. its’ all global subsidiaries pending inquiry."

Following this development, Karan Bagga has been appointed as the acting CEO of Ebix Inc. “He will oversee and control the operations of Ebix, Inc. and all its global subsidiaries,” the company said. Bagga also serves as the CEO of Advik Capital Limited, an NBFC owned by Eraaya promoters.

Under the stockholder agreement executed on August 30, 2024, after Ebix’s exit from Chapter 11 bankruptcy, Eraaya has the exclusive right to appoint all three directors of Ebix, Inc. and its subsidiaries. Exercising this right, the Eraaya Board appointed Himanshu Mody as the third director on the board of Ebix, Inc. and its subsidiaries.

Eraaya emphasized that the business and affairs of Ebix and its subsidiaries will be managed by a board of directors designated by Eraaya. In light of Raina’s suspension, Eraaya plans to send a formal communication to all concerned personnel at Ebix, ensuring that Raina and other identified individuals are prohibited from contacting or intimidating officers or employees of Ebix.

The company also announced the appointment of a new internal auditor to ensure compliance with its governance standards.

An Ebix senior executive revealed to The Head and Tale that Raina instructed his team to boycott the Board meeting that took place earlier today. Sources suggest Eraaya's leadership had been increasingly dissatisfied with Raina’s management style and his approach to running the company.

Earlier this month, Ebix issued a press release celebrating its successful exit from Chapter 11 bankruptcy and becoming debt-free. In the release, Raina was praised as a “visionary entrepreneur,” and he expressed optimism about Ebix’s future. “Ebix 2.0 aims to be lean, efficient, and focused on consistent, profitable growth. I believe this is just the beginning of delivering greater value to our stakeholders. As the Eraaya Chairman, I am equally committed to driving consistent profitability and growth for Eraaya’s investors,” Raina said.

“Raina’s approach is bound to clash with Eraaya’s management. They feel sidelined because he takes all the credit. But now that he’s been acquired, he doesn’t hold the power he once did when he was the one making acquisitions,” a source said. Though Raina isn’t listed as a shareholder in Eraaya, he has claimed to own a significant stake in the company, he added.

Raina’s aggressive acquisition-driven business model is well known in the industry. Several founders of companies acquired by Ebix have voiced frustration over Raina’s approach. “He focuses more on acquisitions than on organic growth,” one insider explained. “He cuts costs by firing staff, shows the company as profitable, and then, when the business falters after a year or two, he doesn’t acknowledge the long-term impact. When profits decline, he simply acquires another company.”

According to the sources, Raina never communicated with employees or management during key moments, including the bankruptcy filing, the acquisition process, or even after the deal was finalized. “We learned everything from press releases. There was no direct communication, not even with managing directors.”

Despite Ebix said to be a management buyout, Raina allegedly never consulted his leadership team about the acquisition. “We found out about Eraaya’s involvement through the press release. It was supposed to be a management buyout, but Raina never involved us in the acquisition process,” the senior official added.

Since the acquisition, Sachin Seth, managing director of Ebix Technologies, and Amit Garg, Chief Financial Officer of Ebix, have both resigned.

Following the acquisition, Raina, who hadn’t visited the U.S. in six years, flew to the country shortly after the Eraaya deal and has been there since.