Commitments and Contingencies

6 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

On February 22, 2021, Christine Marie Teifke, a purported purchaser of Ebix securities, filed a putative class action in the United States District Court for the Southern District of New York, captioned Teifke v. Ebix, Inc., et. al., Case No. 1:21-cv-01589-JMF, on behalf of herself and others who purchased or acquired Ebix securities between November 9, 2020 and February 19, 2021. The complaint asserts claims against the Company, Robin Raina, and Steven M. Hamil (“Defendants”), for purported violations of Section 10(b) of the Securities Exchange Act of 1934, alleging that Ebix made false and misleading statements and failed to disclose material adverse facts about an audit of the company's gift card business in India and its internal controls over the gift and prepaid card revenue transaction cycle. The complaint alleges that Ebix's stock price fell as a result of the revelation that Ebix's independent auditor, RSM US LLP (“RSM”), had resigned, citing concerns with the company's internal controls and disagreements over other accounting issues. The complaint also asserts a claim against Robin Raina and Steven M. Hamil for purported violations of Section 20(a) of the Exchange Act arising out of the same facts. The complaint seeks, among other relief, damages and attorneys' fees and costs. On May 11, 2021, the court issued an order appointing Rahul Saraf, another purported purchaser of Ebix, Inc. securities, as lead plaintiff in the action, and the caption in the action was changed to Saraf v. Ebix, Inc., et. al., Case No. 1:21-cv-01589-JMF (the "Class Action"). On July 17, 2023, the Court dismissed the Class Action in its entirety with prejudice for failure to state a claim.

On May 14, 2021, Javier Calvo, a purported shareholder of the Company, filed a derivative action in the United States District Court for the Southern District of New York on behalf of Ebix captioned Calvo v. Raina, et. al., Case No. 21-cv-4380-JMF (the "Calvo Action"), against individual defendants Robin Raina, Steven M Hamil, Hans U. Benz, Rolf Herter, Neil D. Eckert, Pavan Bhalla, Hans Ueli Keller, and George W. Hebard, and nominal defendant Ebix asserting claims related to the RSM resignation. On July 13, 2021, Peter Votto, another purported Ebix shareholder, filed an additional derivative action in the United States District Court for the Southern District of New York on behalf of Ebix, captioned Votto v. Raina, et. al., Case No. 21-cv-5982-JMF (the "Votto Action"), asserting claims against the same defendants as the Calvo Action. The complaint asserts claims relating to the RSM resignation against all of the individual defendants for breach of fiduciary duties, unjust enrichment, waste of corporate assets, and rescission under Section 29(b) of the Securities Exchange Act of 1934, and claims for contribution under Sections 10(b) and 21D of the Securities Exchange Act of 1934 against Robin Raina and Steven M Hamil. The Consolidated Derivative Action is currently stayed by agreement of the parties and order of the Court.

On November 5, 2021, Daniel Lilienfeld, a purported shareholder of the Company, filed a derivative action in the United States District Court for the Northern District of Georgia on behalf of Ebix captioned Lilienfeld v. Raina, et. al., Case No. 1:21-cv-04590-ELR (the "Lilienfeld Action"), asserting claims against the same defendants as the Consolidated Derivative Action. The complaint similarly asserts a claim of breach of fiduciary duty related to the RSM resignation against all of the individual defendants. On July 26, 2023, Mr. Lilienfeld dismissed the Lilienfeld Action without prejudice.

On December 29, 2021, Sunil Shah, a purported shareholder of the Company, filed a derivative action in the Superior Court of Fulton County of the State of Georgia on behalf of Ebix captioned Shah v. Raina, et. al., Civil Action File No. 2022-cv-358481 (the "Shah Action") against the same defendants as the Consolidated Derivative Action and Lilienfeld Actions. The complaint similarly asserts a claim of breach of fiduciary duty related to the RSM resignation against all of the individual defendants. The Shah Action was stayed by agreement of the parties and order of the Court. On July 26, 2023, Mr. Shah dismissed the Shah Action without prejudice.

The Company along with Ebix Singapore Pte. Ltd. (the “Ebix Group”) had purchased 80% Equity Shares of Ebix Payment Services Private Limited (“ItzCash”) with effect from April 1, 2017. During the Financial Year 2020, the erstwhile shareholders of ItzCash raised a dispute with the Ebix Group alleging breaches of the share purchase agreement and shareholders’ agreement entered into between the parties and demanding for termination of the shareholders’ agreement, payment of earn out consideration and buyout of minority shareholding. The matter is under arbitration in accordance with the rules of the Singapore International Arbitration Centre (“SIAC”). The arbitration proceedings have concluded, and the arbitral tribunal has passed a partial order dated June 1, 2023 (“Partial Award”) which inter alia states the following (i) the termination of the shareholders agreement executed amongst the Company, Ebix Singapore, Ebix World Money, Vyoman, Ashok Kumar Goel and Ebix Payment Services dated May 12, 2017 (“SHA”) by Vyoman and Mr. Goel was justified (ii) our Company and Ebix World Money (and failing performance, Ebix Singapore) are jointly and severally obliged to purchase the existing shareholding of Vyoman and Mr. Goel under the SHA at a price determined by an independent valuer, once such determination has been made in accordance with the relevant provisions of the SHA and (iii) Claimants were not entitled to specific performance to receive payment of the first and second earn-out thresholds under the aforementioned agreements; and (iv) our Company, Ebix Singapore, Ebix World Money and Ebix Payment Services were found in breach of certain clauses of the aforementioned agreements. Due to absence of explanation of how Claimants incurred or may have incurred losses pursuant to such breaches of the above mentioned agreements the Partial Award directed payment of nominal damages by the Respondents in an joint and several manner to the Claimants as follows: (i) SGD 200 each to Vyoman and Ashok Kumar Goel in respect to the breaches of the SHA and (ii) SGD 100 to each of the 17 other claimants in respect to breaches of the Promoter SPA,

Employee SPA and Investor SPA. The Partial Award also states that the directions in relation to the arbitration costs will be dealt in the final award. The matter is currently pending.

The Company is involved in various other claims and legal actions arising in the ordinary course of business, which in the opinion of management, the ultimate likely disposition of these matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations or liquidity.