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The new interim CEO of MoviePass' owner had deep ties to an Indian company accused of massive fraud

MoviePass

  • Helios and Matheson Analytics, the parent company of defunct movie-ticket-subscription service MoviePass, has named a new interim CEO: Parthasarathy "Pat" Krishnan.
  • Krishnan had deep ties to Helios and Matheson Analytics' former parent company, Helios and Matheson Information Technology (HMIT), which has been accused of massive fraud in India.
  • Krishnan served as CTO of HMIT from 2006 to 2013, according to filings with the Securities and Exchange Commission. He wasn't formally named or accused in HMIT's legal proceedings. 
  • Helios and Matheson Analytics' (HMNY) previous CEO, Ted Farnsworth, had worked to distance the company from its former Indian parent.

Last month, penny-stock guru Ted Farnsworth stepped down as the CEO of Helios and Matheson Analytics, the parent company of MoviePass, so he could make a bid for the defunct movie-ticket-subscription service after turning it into a cash-burning machine.

Now another controversial CEO has taken the reins.

Last week, Helios and Matheson (HMNY) appointed a new interim CEO, Parthasarathy "Pat" Krishnan, an executive with deep ties to its former parent company, Helios and Matheson Information Technology (HMIT), which has been accused of massive fraud in India. Krishnan was not personally accused of fraud.

Krishnan's involvement in Helios and Matheson predates the Farnsworth era by a decade.

Krishnan came to HMIT in 2004 when the Indian tech company bought Maruthi Consulting, the California-based consulting firm he cofounded. Krishnan served as CTO of HMIT from 2006 to 2013, and then as CEO of HMNY from April 2016 to January 2017, when Farnsworth took over, according to documents filed with the Securities and Exchange Commission.

Though Farnsworth tried to distance Helios and Matheson in New York (HMNY) from Helios and Matheson in India (HMIT) in statements to Business Insider last year, Krishnan is a point of continuity between the two. He served as chief innovation officer during Farnsworth's tenure as CEO of the New York company.

Read more: If you're laughing at the death of MoviePass, you probably aren't paying close enough attention

There's a good reason Farnsworth might have wanted to minimize the connection.

In India, HMIT was accused of defrauding thousands of creditors, including banks and senior citizens, as Business Insider reported last year. In 2016, a judge in Chennai ordered the liquidation of HMIT and its assets to pay back creditors. Since the liquidation order in 2016 — which was temporarily stayed — the various legal cases and investigations have dragged slowly through different venues in India and have still not concluded.

Krishnan wasn't personally named or accused of fraud in the legal proceedings. Still, Maruthi Consulting, the US-based firm Krishnan cofounded, was referenced in HMIT's legal drama in India last year. In a March 2018 complaint to India's Central Bureau of Investigation, the State Bank of India accused HMIT of using Maruthi Consulting to siphon money out of India with the "evil intention of defrauding our bank."

Though HMIT's stake in HMNY has dwindled since 2016 because of dilution — due to HMNY issuing millions of new shares to cover MoviePass' losses — the company's former CTO is now back at the helm of the MoviePass owner.

Krishnan and Helios and Matheson Analytics did not respond to multiple requests for comment from Business Insider.

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