Regulations
Helios and Matheson’s defaults and silence of regulators
Several depositors and investors are sending letters, notices to H&M for bounced cheques, while the company is reporting ‘fabulous’ financial results and obtaining ‘fancy’ ratings 
 
Chennai-based Helios and Matheson Information Technology (H&M), an unfancied software company, continues to default on repayment to its depositors and investors. After filing several complaints to market regulator Securities and Exchange Board of India (SEBI), BSE, National Stock Exchange (NSE), Ministry of Corporate Affairs as well as Enforcement Directorate (ED), the shareholders and depositors have now approached Finance Minister Arun Jaitley.
 
"Despite the proclaimed strong financials disclosed to the Stock Exchanges, the company has been, since June 2014, defaulting in the repayment of fixed deposit / interest due thereon to its depositors. This in itself is irrefutable evidence of the company fudging, manipulating its financial results disclosed to BSE and NSE, which calls for a full and thorough investigation of the situation," a letter sent by a section of H&M shareholders and depositors says.
 
Some depositors, whose cheques given by H&M bounced, are sending legal notices to the company directors. All the cheques given by H&M have bounced citing 'insufficient funds'. One of the depositors, who deposited Rs5 lakh each in three fixed deposit receipts (FDRs) was promised an interest of 12.12% per annum, which was to be paid every quarter. H&M issued interest warrants in advance of Rs15,150 each for the three FDRs to be drawn on HDFC Bank as quarterly interest. The company promised to pay the quarterly interest on 16th of March, June, September and December.
 
However, when in December 2014, the depositor submitted three cheques in HDFC Bank all three bounced citing insufficient funds. After failing to get any response from H&M and its officials, the depositor finally sent a notice under Section 138 of the Negotiable Instruments Act to the company directors.
 
Investors and depositors of H&M have also demanded investigation into ratings given and its subsequent withdrawal by CRISIL on the company. They alleged that by its shoddy rating on H&M, the SEBI registered rating agency CRISIL has seriously eroded investor confidence in its rating process.
 
In September 2014, CRISIL assigned 3/5 fundamental grade (good fundamentals) on H&M, due to steady performance of the company. However, suddenly, next month, the ratings agency, downgraded H&M to 2/5 from 3/5 citing 'moderate' fundamentals of the company. "The revision in Helios’ fundamental grade is a result of its deteriorating liquidity. Two major factors are responsible for the liquidity crisis, the company’s working capital days have increased in the last couple of quarters and it could not secure sufficient funds to honour its payment obligations on time. The company needs fresh funds to tide over the tight liquidity position. The company has been delaying the payment of principal in several public deposits matured/getting matured during FY14," CRISIL had said in its October 2014 report.
 
CRISIL in the report said, "The company has been delaying the payment of principal in several public deposits matured/getting matured during FY14. As per Section 74 of the new Companies Act 2013, the company is required to repay all the outstanding deposits from the public either by their respective maturity date or by 31 March 2015, whichever is earlier. Accordingly, we expect additional liability of Rs400 million to mature by 31 March 2015 (as public deposits due in FY15-17 would get advanced). The inability to raise funds to service the due liabilities plus upcoming liabilities are expected to further tighten Helios' liquidity going ahead."
 
According to the report from the ratings agency released in October 2014, as on third quarter of FY2014, the receivables of H&M, including debtors and unbilled, increased by Rs44.8 crore resulting in 125 days of sales outstanding (DSO) compared with 106 in second quarter in the same fiscal year. "Revenues (of H&M) increased only by Rs3 crore q-o-q in Q3FY14. This resulted in tie-up of funds in working capital leading to an elongated cash conversion cycle. The management has indicated that the receivables may remain high in the coming quarters as well," CRISIL had said. 
 
Not just common investors deposited money in H&M to earn 1% or 2% more, there are several well-educated professionals, including bankers, who have put their hard-earned money in this Chennai-based company.
 
Earlier in February 2013, Moneylife had reported on how overlooking several reports about criminal case pending against H&M's chairman and managing director, the ratings agency had assigned 5/5, its highest grading on the company. According to CRISIL report, banking, finance and insurance companies (BFSI) and healthcare segment would drive future growth of IT services in India during 2013 and, H&M would get benefits from it as the company works with seven of the 20 largest global banks.
 
Moneylife had previously reported about the bruising battle between H&M and Rajeev Sawhney, chairman of Vmoksha Technologies Pvt Ltd and a US-based non-resident Indian (NRI). The battle started in 2005 when H&M announced a $19 million buyout of Vmoksha, co-founded by Rajeev Sawhney and Pawan Kumar (former CEO of the controversial DSQ Software), with the former putting in the money and the latter running the operations. Mr Sawhney soon realised that he had been kept in the dark about many aspects of the deal. 
 
On 11 May 2005, both the companies signed a share purchase agreement under which V Ramachandran, chairman of H&M, was to pay $19 million for the three units, out of which $4 million was to be paid to Pawan Kumar, the then chief executive of Vmoksha and also former CEO of the controversial DSQ Software, as earn out. Although, Pawan Kumar and his family members were also stakeholders in Vmoksha, Mr Sawhney later bought out their stake as well. 
 
Mr Ramachandran was supposed to pay $13.4 million to Mr Sawhney, after paying some amount to Tapan Garg and Madhuri Garg, son and wife of Pawan Kumar for their holding. Mr Sawhney soon realised that he had been kept in the dark about many aspects of the deal. For instance, he found that instead of receiving $19 million, a bank account had been ‘fraudulently’ opened in the State Bank of Mauritius in Vmoksha’s name and used to borrow $13.5 million, using a fake board sanction and false entries. That money was remitted to H&M ostensibly for subscription of redeemable preference shares on 28 June 2005.  
 
Earlier in December 2011, the Supreme Court dismissed special leave petitions (SLPs) filed by H&M and Pawan Kumar, the then chief executive officer of Vmoksha Technologies. Both have challenged the Bombay High Court (HC) order, which allowed the revision application of Vmoksha’s co-founder Rajiv Sawhney against H&M. The question is when it is known to all that H&M is defaulting on repayments, why the stock exchanges, the first line of regulators and SEBI has kept quite. Why there is no action against the company and its top executives till date? Will Finance Minister Jaitley take cognisance of the complaint and make sure that the investors are at least repaid their hard earned money?
 
You may also want to read...
 
 
 
 

User

COMMENTS

Rupesh Revankar

4 months ago

i am also suffering from the same. I have FD of Rs.1,50,000/- and Rs.75,000/-.

Venkataraman Ramakrishnan

11 months ago

i also suffered the same fate. i was infd. that Company had given
undertaking to Courts on repayment. Any further devpt.?

anitha

2 years ago

Please sign our petition as Helios & Matheson is not paying our full & final settlement salaries and also PF amount.

https://http://www.change.org/p/helios-matheson-managem...

Arun M Purohit

2 years ago

IN SUCH SITUATIONS PLEASE JOIN MY GROUP ON FACE BOOK , FOR MORE INFORMATIONS YOU MUST JOIN MY FACEBOOK GROUP ALONGWITH COMPLETE DETAILS i.e. MAIL ID , CELL NO. , ETC.... , I WILL SEND A LINK TO YOUR MAIL ID ENABLE YOU TO JOIN MY GROUP WHERE CAN RAISE YOUR QUERRIES / ASK A QUESTION WHICH FINALISE TO ADVISE/GUIDE IN A BETTER WAY

shrushti ajit sharma

2 years ago

MY NAME IS AJIT DINDAYAL SHARMA AND I HAVE INVESTED RS.100000/= IN helions and matheson information technology limited ON 27th NOVEMBER 2013 FOR THE PERIOD OF 36 MONTHS @ 12% AND MY MY TDR NO.IS FDB030632 AND MATURITY DATE IS 27th NOVEMBER 2016 BUT SINCE 16th FEBRUARY 2015 THE COMPANY'S MONTHLY INTEREST CHEQUES ARE RETURNED DUE TO INSUFFICIENT FUNDS YOUR PROMPT ACTION WILL BE HIGHLY APPRECIATED

THANKS AND REGARDS

AJIT DINDAYAL SHARMA
MOBILE 9004468206
9322835183
9619385823

REPLY

Arun M Purohit

In Reply to shrushti ajit sharma 2 years ago

AFTER TRYING MANY TIMES LINK IS NOT WORKING , MAY I HAVE YOUR MAIL ID ENABLE TO SEND IT

Arun M Purohit

In Reply to shrushti ajit sharma 2 years ago

http://www.facebook.com/groupinvite/ATV0Nf9psvy...

Arun M Purohit

In Reply to shrushti ajit sharma 2 years ago

https://http://www.facebook.com/groups/1660879314144812...#

FOR MORE INFORMATIONS JOIN MY ABOVE GROUP ALONGWITH COMPLETE DETAILS i.e. MAIL ID , CELL NO. , ETC.... , FB GROUP LINK IS MENTIONED ABOVE

Arun M Purohit

In Reply to shrushti ajit sharma 2 years ago

FOR MORE INFORMATIONS JOIN MY GROUP ALONGWITH COMPLETE DETAILS i.e. MAIL ID , CELL NO. , ETC.... , FB GROUP LINK IS

https://http://www.facebook.com/groups/1660879314144812...#

Arun M Purohit

In Reply to shrushti ajit sharma 2 years ago

FOR MORE INFORMATIONS JOIN MY GROUP ALONGWITH COMPLETE DETAILS i.e. MAIL ID , CELL NO. , ETC.... , FB GROUP LINK IS

EXTREMELY SORRY MY PREVIOUS LINK NOT WORKING , HENCE SENDING HEREWTITH NEW ONE

https://http://www.facebook.com/groupinvite/ATV0Nf9psvy...

Arun M Purohit

In Reply to shrushti ajit sharma 2 years ago

FOR MORE INFORMATIONS JOIN MY GROUP ALONGWITH COMPLETE DETAILS i.e. MAIL ID , CELL NO. , ETC.... , FB GROUP LINK IS

https://http://www.facebook.com/groups/1660879314144812...

Satish Bilgi

2 years ago

I too have monies due from Helios & Matheson since Jan 2015 and have more monies invested in this Company which will be due in the next 1 year. pl let me know whom I should approach to get the money back. Satishchandra Bilgi , Mumbai ( 98210 47513 ) . pl note : any help given now will save my life long savings deposited in this company post my retirement .

REPLY

Arun M Purohit

In Reply to Satish Bilgi 2 years ago

AFTER TRYING MANY TIMES LINK IS NOT WORKING , MAY I HAVE YOUR MAIL ID ENABLE TO SEND IT

Arun M Purohit

In Reply to Satish Bilgi 2 years ago

FOR MORE INFORMATIONS JOIN MY GROUP ALONGWITH COMPLETE DETAILS i.e. MAIL ID , CELL NO. , ETC.... , FB GROUP LINK IS

https://http://www.facebook.com/groupinvite/ATV0Nf9psvy...

shishir sinha

In Reply to Satish Bilgi 2 years ago

I have also deposited my life savings of 23 lacs. My husband is no more, contrary to his advise, I have gone ahead and lured by the higher interest rate of 2 % more. I also dont know what to do, anyone who is kind to help me, an old lady (75 years) please call on 7738100627 and advise remidial action that I should take.

Arun M Purohit

In Reply to shishir sinha 2 years ago

FEELING VERY SAD TO KNOW , FOR MORE INFORMATIONS YOU MUST JOIN MY FACEBOOK GROUP ALONGWITH COMPLETE DETAILS i.e. MAIL ID , CELL NO. , ETC.... , I WILL SEND A LINK TO YOUR MAIL ID ENABLE YOU TO JOIN MY GROUP WHERE CAN RAISE YOUR QUERRIES / ASK A QUESTION WHICH FINALISE TO ADVISE/GUIDE IN A BETTER WAY

Dayananda Kamath k

2 years ago

Authorities are busy in taking action on companies where there are no complaints. so if you make a complaints they will ignore it as you are asking them to do their duty. and they want to do the duty which suits them. they will initiate action only when it reaches thousands of crores, and some interested powers that be is effected. in india every regulatory action is also determined by connections for the issue.

Saumil Mehta

2 years ago

Plethico Pharma is one more such company that has defaulted. The MD draws a remuneration of 4 crores

manoharlalsharma

2 years ago

INFECTED BY POLITICS so no need of thinking as done with SAHARA or MALLYA or SHAH,as per Indian legal formalities and ethics LAW WILL TAKE IT'S own course.as we have seen at the times of last President's note in the matter of JAN-LOKPAL SENSE OF THE HOUSE.No one still understood.

R S Murthy

2 years ago

Almost 4 decades ago, that is during my early days of banking career, one elderly north indian business man (not even a graduate) advised me that, if any one pays more than the reasonable rate of interest say 9%, we have to assume and pressume that either our principal is at stake or the payer may be engaged in an unlawful trade.Several happenings are prooving that the advise is wise.
Just like fish that are lured by the bait, public are lured with high returns.Even senior and learned people are unable to control the temptation and land up in problem. There is no use of blaming any one including regulators. Blame our own weakness for being cheated or looted.

Shashibhushan Vidyadhar Gokhale

2 years ago

Moneylife Foundation is doing a great job by exposing and highlighting such frauds. Hats off to you.

Railways suspend two TCs for assaulting youth in Mumbai local

Two TCs assaulted a youth travelling on invalid ticket, instead of asking him to pay a fine. Video of the incident went viral on social media forcing the Railways to suspend the TCs

 

The Railways have suspended two of its ticker checkers (TCs) for assaulting a youth in local train. When video of the two TCs assaulting the youth in Panvel-Thane route went viral on social media, the Railways decided to take action against its employees.
 
According to media reports, on 16th January, the youth was travelling on Panvel-Thane trans-harbour local train without a proper ticket. The youth was carrying his monthly season pass (for Vashi-Thane route), which was not valid on the Panvel-Thane route. However, instead of asking the youth to pay fine, both the TCs started hitting him. One of the co-passengers shot the video of the incident and shared it on social media, prompting angry reactions from commuters and activists. This led to the suspension of the TCs by Railways.
 
However, this is not an isolated incident where TCs are involved. Few days ago, three TCs assaulted an officer from the Central Bureau of Investigation (CBI). Unfortunately this was a trap set up by the CBI to catch these TCs, who were notorious for demanding excess money from ticketless rail passengers. The CBI also recorded the assault by TCs and further investigations are going on.  
 

User

COMMENTS

Veeresh Malik

2 years ago

I have seen the absolutely illegal way in which TCs from the Central Railway TC office next to the Upper Class Waiting Room at Dadar Central behave with people who by mistake stroll on to Central Railway area from the overhead pedestrian bridge. I have seen them beat people with ropes, tie them up, and use abusive language if the people are non-Marathi. Good to hear that CBI finally did something.

SEBI under CBI Lens
Will SEBI's draconian powers be curtailed now?
 
Among the many hurried and ill-considered legal amendments pushed by the United Progressive Alliance (UPA) government in its last months in office was the comprehensive amendment to the Securities & Exchange Board of India (SEBI) Act. The amendment has made SEBI among the most powerful capital market regulators in the world. It allows SEBI to seize assets, settle claims through consent or order the arrest of a person without intervention or ratification by a judicial forum. This was done even though SEBI’s handling of civil powers, such as consent and adjudication, were arbitrary as well as capricious. SEBI has consistently refused to issue detailed speaking orders in consent cases and there are innumerable instances where similar charges have led to vastly different settlement terms or penalties. 
 
At the end of 2014, SEBI used these sweeping new powers to order the civil imprisonment of one Vinod Hingorani for six months or until the dues are paid. The order was signed by a deputy general manager and recovery officer. The action led to a flutter in corporate and legal circles which seemed to realise the implications of SEBI’s sweeping powers only after the arrest. The buzz in legal circles was that SEBI ought to have exhausted all other remedies like attaching the assets of the person before going for a more drastic action. Also, the regulator does not seem to have framed any guidelines on when and how the power to arrest would be used nor even ensured that the recovery officer is a senior executive with adequate training in judicial processes. 
 
What makes the super powerful market regulator a matter of bigger worry is that SEBI itself is under a cloud. As many as 30 SEBI officials, many at the highest level in the regulatory body, have come under CBI (Central Bureau of Investigation) in cases relating to MCX-SX, the Saradha Chit Fund scam and Bank of Rajasthan. 
 
Some would argue that the police as well as officers of many tax and enforcement agencies face just as many charges of corruption, extortion and misconduct. All the more reason why SEBI’s draconian powers to curtail the liberty of a person over what are essentially civil offences must be subject to some judicial intervention or oversight. This is especially important if the prime minister wants India to be an easier place to do business in. 

User

COMMENTS

vswami

2 years ago

An Update (latest from SAT):

ICL Blogs Link HERE

"SAT Order in the DLF Case: Controlling SEBI’s Punitive Vehemence"
< the learned professional's write-up, may be read with posted comments, for clues to embark an independent study!

Dipakkumar J Shah

2 years ago

Whatever the Powers Authorities Given to SEBI after closure of Controller of Capital Issues are for only cash counter other than Registrar of Companies and Ministry of Corporate Affairs only.
They issues order but no follow up !!!! Public Issue of Ratnamani Engineering Limited as back in 31.03.1994 made a public offer . Out of this sum of public issue , by way of mere book entry of Profit not received in actual from any body outside paid the dividend , though Loss was on record. Complaint was lodged with R O C and also SEBI , nothing so far all these years??!!!

REPLY

vswami

In Reply to Dipakkumar J Shah 2 years ago

To supplement:

Pithily stated, each one of these authorities in place, - with no exception, including the other type of self- or semi’ regulatory ones but portrayed as ‘regulators’ - are intended /expected to effectively function in the demarcated respective field as bodies of “public servants” (within its true sense). Historically, however, such intention or expectation has come to be proved a myth; if were to be blunt, an unashamedly shameful faux pas. With omnipresent wanton failure to act/blatant inaction, especially even if and when absolutely warranted in the larger societal / public interests is noted to be the inevitable ‘ORDER’ of THE DAY. No wonder, despite the enormity of /volumes of so-called laws, rules , and regulations, being churned out all the time, recklessly but with vengeance, mostly as a pastime, the common man’s aspiration for ‘order ‘ has been perennially eluding, and rendered a pipe dream. That such is the harsh field reality came to be realised and been brought on governmental record, in the form of special committee reports ; but lo ! as was not unexpected , been allowed to simply gather dust in its arhives.
To anyone sincerely and intimately concerned, more so wishing to have an insight, a host of material in public domain might be of academic interest, if nothing else or beyond.
Specimen : On the topic of , -Authority & Accountability in Fiscal Administration; and

BLOGs @,-
> http://indiacorplaw.blogspot.in/2013/09/...
>A stronger backbone for regulators
>On Regualory ; SEBI , A/C Profession B /Fs (old Blogs)

vswami

2 years ago

OFFHAND
Looking back, ever since the exclusive regulator for stock markets came into being, there have been quite many instances in which its sporadic deeds/ impulsive actions, verging on not merely draconian but dictatorial disposition, have become questionable. That has been so, not merely in the larger public interests and health of the economic activity, but even on strictly legal grounds. One such instance, as recalled, is when SEBI, blatantly acting in excess of its vested powers, gone ahead in a cavalier fashion to mandate the requirement of PAN for 'demat accounts', going overboard. That was so done dogmatically assuming power it did not have, single handed with no known consultation or deliberation; and without even caring to take a conscious note of what the IT Act, of which PAN is a special creature, itself provides.
Albeit that has now faded into past history, if itching to know the critical viewpoints on that episode, a couple of articles published in Taxmann journal may be read.

Citation

PAN' REQUIREMENT FOR DEMAT ACCOUNT HOLDERS 2006) 6 CAT 565

SEBI'S DIRECTIVES MANDATING ‘PAN’ REQUREMENT (2006) 7 CAT 64

Like critique on certain other related aspects is to be found on a search of the ICL Blogs, in public domain.

mm sundram

2 years ago

sebi officials are acting as if they are running the personal shows and they are not at all taking any kind of responsibilities for the frauds or gross violations committed by the Stock exchanges and its members. even the Depository also violating the rules without safeguarding the investors assets. then what for this SEBI? we are all assuming that the SEBI is equal to SEC the us regulators whereas the SEBI is no way near. i have given proven violations by the leading SEs/Depository and stock broker. no action taken even after 7 years. the matters referred to PMO and Finance minister office also.

Vaibhav Dhoka

2 years ago

Since long SEBI's official are and were involved in corruption charges.They are competing with Revenue and police in corruption.Since there is no accountability for an government employee the corruption plays big role,and in India corrupt are protected by their political masters as both are hand in glove.And there is no judicial action against corrup.

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