Fixed Income
Corporate FD Holders Facing Tough Times; appeal to govt.
Moneylife Foundation has sent a memorandum to Arun Jaitley, highlighting how high profile companies like Helios Matheson and Jayprakash Associates have left their FD holders in a lurch
 
Tens of thousands of investors, including senior citizens, are stuck with fixed deposits in companies that are neither refunding their principal nor paying interest. Many of these investors have run from pillar to post, complaining to the company and agencies like the ministry of corporate affairs (MCA), company law board (CLB), economic offences wing (EOW) and the Securities & Exchange Board of India (SEBI). The complaints have fallen on deaf ears. One of the most egregious cases is that of Chennai-based Helios and Matheson Information Technologies Ltd (H&M). According to a status report submitted to the Madras High Court, H&M has collected Rs55.25 crore from 6,540 depositors from across the country. In January 2016, the Madras High Court ordered the liquidation of H&M and appointed an official liquidator. The hard-hitting court order noted that the company had siphoned off funds, ‘appears unreliable’ and ‘cannot be believed any further’. It has also directed an investigation by the serious frauds investigation office (SFIO). Moneylife has carried many reports related to H&M, highlighting, among other things, that, despite the company reporting good numbers, it has not been able to pay fixed deposit-holders. As per the reported numbers, the company has a track record of uninterrupted profits (60 straight quarters). At present, H&M continues to be traded on the stock exchanges without providing any comprehensive data, as required under the listing agreement of bourses, or facing any action from the regulators. 
 
Many of the companies that have defaulted on corporate deposits claim to be diversified industrial conglomerates. Stories like that of H&M, along with stories of other corporate defaults, highlight a deep rot in our regulatory and enforcement structure. They show that companies can get away with fake disclosures even as the grievance redress system of companies defaulting on fixed deposits remains either slow or non-existent. There is no fear of punitive action by the government. 
 
People who have invested in FDs, but have not yet got their money back, are facing major hardships. Many of them are senior citizens and need money for their sustenance and medical expenses. Many of them send repeated reminders to companies and complain to regulatory agencies, with little success. Some of them are homemakers who have no other source of income. This is in stark contrast to the promoters of these defaulting companies who continue to flaunt their wealth. 
 
Many people choose corporate FDs, lured by a slightly higher interest rate than available on bank FDs. Chasing high returns of company FDs can expose you to the risk of losing your principal if you don’t check the credibility and rating of the company and the instrument. It is simply not worth investing in a company FD only because the return is high. In fact, it should sound a warning bell since it means that the company is unable to raise resources from anywhere at lower rates, because its finances are weak. Some companies, from reputed groups like Jaypee and Yash Birla group have also defaulted. Companies like realty major Unitech, which was once a reputed large-cap company, have also not been able to pay their depositors. Thus, putting blind faith in a corporate group that is considered to be reputed may not work. 
 
At the request of many aggrieved seniors, Moneylife Foundation launched an online survey to collate information from investors with complaints about their FDs. Some 1,138 investors responded to our survey. They have filed a total of 1,596 complaints that have not got any redress. Unsurprisingly, H&M accounts for the largest number of complaints. Besides H&M, companies which have a large number of complaints are: Elder Pharmaceuticals, Jaypee Group, Unitech, Plethico Pharmaceuticals and Bilcare Ltd. The other companies were: Neesa Leisure, Phadnis Infrastructure, Micro Technologies, Jaypee Infratech, Yash Birla group of companies and Omnitech Infosolutions. 
 
The survey found that a majority of the aggrieved depositors choose to complain to the company itself, which is pointless. The CLB, MCA, EOW and SEBI are the regulatory agencies with whom they should seek to get their grievance redressed. 
 
The survey found that a mere 2% of the complaints made to the companies were redressed. A whopping 83% were unresolved, while others did not complain. Repeated phone calls, e-mails and sometimes even personal visits and pleading to these companies have not yielded any results. Many companies and their officers do not revert to the depositors. Some of the companies give repeated extensions for the due date of principal and interest, but they are not repaid even after the extension date elapses.  
 
The plight of many of these complainants is pitiable. A few of them are handicapped. Some of the senior citizens sent their medical bills to the company to make it aware of their state of affairs. Here is a sample of complaints from aggrieved depositors:
  1. Prem Swaroop Bhatnagar from New Delhi raised a complaint with reference to deposits of H&M to EOW, Chennai, in December 2014. He raised complaints to MCA, ROC and CLB in April 2014. However, he has not received any response from them till date.
  2. Parag Raje from Thane, who is handicapped, lame and bedridden, complained in May 2015 regarding non-payment of FD principal and interest relating to Elder Pharmaceuticals Ltd. 
  3. Arvind Singh Rana from Delhi has not received FD interest as well as principal from Unitech Ltd. He has made several phone calls to its office and sent several e-mails. However, none of them elicited a response. He is wondering why the company is not maintaining transparency with the investors. 
  4. Nutan Shrivastava, holds two FDs of Plethico Pharmaceuticals Ltd which are overdue. The company has made no attempt to reach out to the investors to inform them of the reasons for the delay, nor about when the payments will be made. She needs the money urgently, for a family exigency and needs to know when she will be paid her rightful dues.
  5. Ahsa C Paradeshi has an FD with Zenith Birla (I) Ltd. She has made repeated complaints and sent several emails, undertaken endless correspondence and followed up with reminder letters and made telephone calls to the office of Zenith Birla (I) Ltd. However, no one has given any answer regarding the repayment of the FD.

See the Memorandum sent by Moneylife Foundation to Mr Arun Jaitley, the Minister of Finance and Corporate Affairs…
 

NOTE: We at Moneylife request all readers not to share their mobile numbers here. This is a public platform and your mobile number/s may be misused. Kindly do not post your mobile number/s.

User

COMMENTS

Suma

2 months ago

Any update on Neesa Leisure FDs? No update from the company or MCA or RoC Ahmedabad. Are there any affected depositors who can join together to fight and make the co pay? 9980092160, Bangalore

PRABHAT B MUKERJEE

2 months ago

what is the latest response from Finance Ministry in this regard ?
kindly pursue your representation further and let us know the outcome.

REPLY

Nikhil S Girme

In Reply to PRABHAT B MUKERJEE 2 months ago

Money life can't do anything ...They have done representation earlier..Now you are requested to follow up with respective courts for further

Nikhil S Girme

In Reply to PRABHAT B MUKERJEE 2 months ago

Money life can't do anything ...They have done representation earlier..Now you are requested to follow up with respective courts for further

Nikhil S Girme

In Reply to PRABHAT B MUKERJEE 2 months ago

Money life can't do anything ...They have done representation earlier..Now you are requested to follow up with respective courts for further

Jayashree swaminathan

In Reply to Nikhil S Girme 2 months ago

there is a whatsapp group send me an email [email protected] to add you to the whatsapp group or join the face book group https://www.facebook.com/groups/773704369461647/

Sudhindra

In Reply to Jayashree swaminathan 2 months ago

thanks Jayashree mam for the FB link. I also have invested in Unitech FD! any update on the same?

Ramamurthy Srinivasan

2 months ago

disappointed not recd the amount as promised kindly let me know when jp is going to pay

REPLY

Nikhil S Girme

In Reply to Ramamurthy Srinivasan 2 months ago

Like we had expected and conveyed earlier also there is no gurantee that a defaulting company FD will adhere to any order

Nikhil S Girme

In Reply to Ramamurthy Srinivasan 2 months ago

Like we had expected and conveyed earlier also there is no gurantee that a defaulting company FD will adhere to any order

Deven Bharat Doshi

2 months ago

The US arm of H&M is doing very well. Is there something that we can do to get them to pay?

PRABHAT B MUKERJEE

2 months ago

I have matured fixed deposits with JP ASSOCIATES, ELDER PHARMA, ZENITH BIRLA AND HELIOS & MATHESON , which have still not been paid by these companies. Can I give the FD details to MONEYLIFE for taking up with the concerned govt officials for their intervention.? please let me know ;

REPLY

MDT

In Reply to PRABHAT B MUKERJEE 2 months ago

We did our best. But things do not move as fast as one wants. No point in sending details to us. You all investors needs to come together and fight.

Ramamurthy Srinivasan

In Reply to MDT 2 months ago

can you kindly give the status report of the cases against zenith birla elder pharma plethico ghemicals and heleos matheson

Deven Bharat Doshi

In Reply to MDT 2 months ago

Hi.. Are there specific forums where FD holders can come together? Whatsapp?

Ravi Krishnamachari

3 months ago

Dear Jayshree, You have given some hope to Investors by providing very positive and vital information. I would appreciate if you could share the letter. I have at least more than a dozen people who have invested in Jai Prakash Associates on my advice.

REPLY

Sudharsan

In Reply to Ravi Krishnamachari 2 months ago

Ravi : Please share your mobile, we already created a wats app group for JP associates. So we can add you in the group to get information .

Jayashree swaminathan

In Reply to Sudhindra 2 months ago

msg me your number ... my tel number is 9818712190

PRABHAT B MUKERJEE

In Reply to Sudharsan 2 months ago

my mobile no 9823072757. unpaid Fds with JP Associates, Helios & Matheson, Zenith Birla and Elder Pharma. thanks Prabhat B Mukerjee

Jayashree swaminathan

In Reply to PRABHAT B MUKERJEE 2 months ago

added you to the group

Ramamurthy Srinivasan

In Reply to Sudharsan 2 months ago

my mobile no 7486851020 srinivasan kindly include me in whatsapp group

Jayashree swaminathan

In Reply to Ramamurthy Srinivasan 2 months ago

added you to the group

Sudhindra

In Reply to Sudharsan 2 months ago

Do we have also have a Whats App group for the ppl who have invested in Unitech as well?

Sriram Ranganathan

In Reply to Sudharsan 2 months ago

Pls add me to your Whatsapp group- 9811812423...Tks

Jayashree swaminathan

In Reply to Ravi Krishnamachari 3 months ago

There is a judgement which clearly says that all FDs have to be cleared to the customers by 31st March 2017 and there will not be any extension. hence they will clear dont worry take my word.

Jayashree swaminathan

3 months ago

check for your FD for contact details

Aruna Muthukrishnan

3 months ago

Dear Jayashree Swaminathan, Can you please share the Letter & also provide me with contact details in order to get my principal & outstanding dues on my overdue FD's. Thanks for your co-operation in this regard.

REPLY

Jayashree swaminathan

In Reply to Aruna Muthukrishnan 2 months ago

any one who needs the judgement let me know..as i am unable to upload the same here.. my email id is [email protected]

Jayashree swaminathan

3 months ago

Guys All FDs will be cleared by 31st March 2017. i am not from Jaypee but i am a buyer of Jaypee flats. if anyone needs any copy of the letter i can share it across

REPLY

Ravi Krishnamachari

In Reply to Jayashree swaminathan 3 months ago

Thanks for the update. It will be a great blessings, relief (or whatever you want to say) for all deposit holders who have put their hard-earned money with the hope of getting reasonable return just 1 - 2% above normal rate on the deposits.

Jayashree swaminathan

In Reply to Ravi Krishnamachari 3 months ago

to get above the normal rate is your capability to negotiate with Jaypee, but i can confirm that you will get your money with the promised interest before 31st March 2017

Nikhil S Girme

In Reply to Jayashree swaminathan 3 months ago

Letters have no meaning ..they have taken extension 5 times already..Letter writing days are over..

Jayashree swaminathan

In Reply to Nikhil S Girme 3 months ago

now they have got money from the selling their power plants to Ultratech and they are expecting the money in another 15 days. so all FDs will be cleared as this can become a criminal case

Nikhil S Girme

In Reply to Jayashree swaminathan 3 months ago

Criminal case enforcement will take min 3 years sir...In India only rich criminals are free

Ravi Krishnamachari

3 months ago

I appreciate the efforts of Moneylife Foundation. But still no concrete action is initiated by FM against defaulting companies. I am a holder of FDR of Jaiprakash Associates. The FD got matured in Feb 2015, but till the time of writing this post, I have not received my money back. When contacted the Fixed Deptt of the company, I was told as per CLB order they will arrange to return all deposits by 31.03.2017. But it seems to me the company does not bother about refunding the money. I am sure it will again approach NCLT with one reason or the other for extension of time.

Vishwanath

1 year ago

Please add Birla Cotsyn, another subsidiary of Birla group, to this list. They have also cheated customers by non intimating and not responding to depositors queries on when the depositors will be paid. Government should take a step and ensure that all the depositors are paid promptly. Most of these companies are well reputed ones, who have deliberately and willingly cheated the gullible public.. especially the Birla Group.

Sudhindra

1 year ago

even my parents have deposited their retiremental income into the Unitech FD scheme and till now their hasnt been any interest or capital back. Hope we dont see the CEO or CMD of Unitech running away like Mallya :(

Dr PS Bhatnagar

1 year ago

The enclosed MCA letter to SFIO is in response to Madras HC order in HM winding up case. Since the said order has now been stayed and referred to 2judge bench, HM may play smart to stall reference to SFIO. Further, there are only 3 original petitioners in the HM winding case, they may settle and pay them off their dues and plead closure of the case on the next hearing date before 2judge bench; as per the opinion of Chennai legal experts. According to them, there is no legal standing of intervening petitioners. A WORD OF CAUTION. Moneylife may like to take up with MCA and SFIO appropriately. It is also added that about a thousand depositors furnished their HM investment details to Registrar, Madras HC, in response to the advertisement asking for such details. On behalf of 6540 investors (as admitted by HM in their affidavit to HC), which is a very conservative figure, I thank Moneylife for their sincere efforts and showing a bright ray of hope in getting our hard-earned savings at this senior age and stage. Thank you once again and wish all the best in their social service to the Society. Dr Prem Swaroop Bhatnagar M# +919899375000; [email protected]

Anoop Chaudhary

1 year ago

Mr. Jaitley FM is busy in bring new Insolvency and bankruptcy law so that it becomes easy to write off all defaults by corporate borrowers-banks loan,FDs, dues of GOVT including tax dues.He is not interested in recovery of any loan or ensuring of repayment of FDs. If action is initiated against any of these defaults money will immediately recovered and FDs paid. He is even opposing to disclosure names of defaulters stating that disclosure will adversely affect the image and business of defaulters. How we can expect any anything from such FM?He is encouraging default.

REPLY

gcmbinty

In Reply to Anoop Chaudhary 1 year ago

Surely, this government is out to save the loan defaulters of all hues by bringing in the Insolvency and Bankruptcy law. Consumers all over India must raise a loud voice and also talk about it in the Local Circle. Citizens of the country must rise to the occasion immediately.

gcmbinty

1 year ago

Company's Act needs to be further amended to secure consumer/investor interests, and it needs massive campaign in the social and other media.

SC seeks suggestion to sensitise people against Sikh jokes
New Delhi : The Supreme Court on Tuesday asked the Delhi Sikh Gurudwara Management Committee (DSGMC) to suggest the ways to sensitise people on the adverse impact of jokes poking fun at the Sikh community.
 
A bench of Chief Justice T.S.Thakur, Justice R. Banumathi and Justice Uday Umesh Lalit asked for the suggestion from the DSGMC which had urged the court to have orientation course at school level to curb such jokes demeaning or hurting the community.
 
Before seeking the suggestions, Chief Justice Thakur pointed out that the country had a Sikh president Giani Zail Singh, Prime Minister Manmohan Singh, the army and air force were at different points of time were headed by Sikhs and "very soon the country will have a Sikh Chief Justice of India" citing the appointment of Justice Jagdish Singh Khehar to the post when he demits office in January 2017.
 
Seeking suggestion from senior counsel R.S.Suri and A.P.S. Ahluwalia, it said that if it passes an order to curb such jokes, then "how will we enforce it".
 
"We will not say something that can't be enforced" as it damages judiciary, said Chief Justice Thakur.
 
"I don't want any order to be passed that can't be enforced. We should have guidelines that court has issued in many cases," Suri told the court suggesting that there should be orientation of the children at school level to sensitise them against making jokes poking at the Sikhs, making unappreciable comments on Biharis or people from the northeast.
 
He told the court that jokes should not become malicious, dirty, demeaning or hurting the sentiments of the people.
 
Pressing for the orientation courses, Suri said that 68 years after becoming republic, what we are witnessing in India is an anarchy. Referring to the way a judge of the Madras High Court has passed an order staying his transfer order issued by Chief Justice of India, Suri said that there was "judicial anarchy.. lawyers in black robes were beating journalist in Patiala House courts".
 
The "court must address the large picture. It requires consideration", he said.
 
The court asked the DSGMC to give suggestion in the course of the hesaring of a PIL by a lawyer Harvinder Chowdhury seeking a ban on websites carrying jokes on Sikhs projecting the community in dim light. 
 
The petitioner has urged the court to direct the government to clamp down on the more than 5,000 websites like www.jokesduniya.com/category/sardar-jokes.htm, as they were "criticising one community and it should stop".
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

User

SC declines to stop Arunachal governor from installing new government
New Delhi : The Supreme Court on Tuesday declined to pass any order on former Arunachal Pradesh chief minister Nabam Tuki's plea seeking to restrain Governor J.P.Rajkhowa from swearing in dissident leader Kalikho Pul or any other person as chief minister.
 
"Now we have heard you. We propose not to pass any order on that," Justice Jagdish Singh Khehar, who heads the constitution bench, told senior counsel Kapil Sibal who appeared for Tuki.
 
The court order came as Attorney General Mukul Rohatgi told the court that it could not pre-empt the constitutional authority from exercising his powers and if some action is taken by the governor, the court has every power to examine it. 
 
Even as Rohatgi urged the court not to restrict the governor from exercising his constitutional authority, senior counsel T.R.Andhyarijnua, appearing for Rajkhowa, told the court that no report has been sent by him to the president recommending the revocation of president's rule. 
 
The court order came in the course of the hearing of the petitions by the constitution bench which also had Justice Dipak Misra, Justice Madan B. Lokur, Justice Pinaki Chandra Ghosh and Justice N.V. Ramana questioning the role of the governor in the ongoing political crisis in the border state. 
 
Sibal told the court that governor could not swear in a person who enjoyed the support of legislators disqualified by then speaker Nabam Rebia.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

User

COMMENTS

Vishal Dhawan

3 months ago

but is there any responce from Mr. Arun Jaitly ?

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)