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Moneylife » Investing » Fixed Income » How to get your money back from Yash Birla group companies

How to get your money back from Yash Birla group companies

Moneylife Digital Team | 24/09/2013 03:09 PM | 

Damyanti Vithalani, a Moneylife reader got her money back from Yash Birla group companies by filing a complaint to MCA portal. Those who invested in the corporate FDs of Zenith Birla (India) and Birla Power Solutions can follow her tactic to get their money back  

Moneylife has received several complaints from agitated readers and senior citizens who have not been able tot get their fixed deposit (FD) maturity amounts from Yash Birla Group companies – Zenith Birla (India) Ltd and Birla Power Solutions. Damyanti Vithalani, who fought for her refund says that a complaint to the Ministry of Company Affairs (MCA) website reached the right ears. Here is what you need to do to get your money back from the Yash Birla group companies.

  1. 1. First, you should file a complaint with the Investor Grievance Cell of the company. Many investors have not got a response to this. It does not matter, follow this step and then escalate the issue if you do not get a response. You can do this by filing an online complaint to MCA.
  2. On MCA website click on the right side menu under ‘Important Links’ click on ‘Lodge Investor Complaints’. It will provide you Investor Complaint Form. Fill in all the necessary information and submit your complaint online.
  3. While filling online complaint form on MCA website you need to enter Corporate identity number (CIN) of company. Zenith Birla India's CIN is L29220MH1960PLC011773 and Birla Power Solutions' CIN is L31101MH1984PLC032773.
  4. You can also file a case against company with the Company Law Board (CLB) under section 58A (9) of Companies Act, 1956 or under section 45QA of the RBI Act, 1934.
  5. You need to fill form no. 4 of Company Law Board Regulations and submit it with a demand draft of Rs50 to nearest CLB Bench.

Ms Vithlani managed to get her money back after filing complaints with the MCA as well as the CLB. She had invested in corporate FD of Zenith Birla India Ltd. On maturity, the company received her FD claim but they did not give any timeline for refunding the money. Later on, she filed complaint on MCA website and wrote emails to the legal team of Yash Birla group as well as the company’s board members, PVR Murthy and Vimal Dubey. She sent a copy of every email to MCA at roc.mumbai@mca.gov.in and Ministry of Commerce (MoC). She also filed her complaint with the CLB. After following this process for a month, she received Rs6 lakh from Zenith Birla India.
 

Between March and June 2013, the CLB had received as many as 130 complaints against other Yash Birla group company, Birla Power Solutions.  Applicants have filed complaints under section 58A(9) of the Companies Act, 1956 as the company has failed to repay their deposits-FDs as per the terms and conditions of acceptance of deposits.
 

On 30 August 2013, in view of the genuine claim of the applicants and also in exercise of powers conferred under section 58A (9) of the Companies Act, 1956, CLB Member Vimla Yadav directed Birla Power, as under:

  1. The company shall make the repayment of the Fixed Deposits with up-to date interest by Demand Draft by 05 October 2013 which shall be sent by Registered Post to the said applicant depositors.
  2. The company shall examine the Pre-mature cases of the depositors in the context of hardship cases and arrange to pay those who require the funds immediately.
  3. The company shall file an affidavit of compliance with the CLB by 10 October 2013 to the effect that it has repaid the deposits to the 130 depositors. A copy of the Affidavit to be sent to the Registrar of Companies, Mumbai Maharashtra as well.
  4. Any failure to comply with this order on the part of the R-I Company shall attract the penal provisions contained in sub-section 10 of section 58A of the Companies Act, 1956.
  5. The Bench Officer shall forward a copy of this order to the Registrar of Companies, Maharashtra also.
  6. In the event of non compliance of this order, the Registrar of Companies, Mumbai Maharashtra, 100, Everest Building, Marine Drive, Mumbai-2 shall initiate prosecution proceedings against the company and its every officer including the Mg. Director of the company before 30 November 2013.

As of March 2012, Yash Birla group companies owe Rs97.25 crore to small investors invested as fixed deposit. Birla Power Solutions owes the highest, Rs57.92 crore while Zenith Birla (India) owes Rs33.19 crore to FD holders. Birla Cotsyn (India) and Shloka Infotech have collected FDs worth Rs5.67 crore and Rs52.84 lakh from investors as of March 2012. Yash Birla group companies have not yet published reports for end-March 2013.
 

Are Yash Birla Group companies in deep trouble? Yash Birla Group of companies has been struggling with many issues like liquidity crunch, non-payment of loans, negative cash flows etc. Most of its companies are giving negative returns to the investors and its share prices are not even in double digits.
 

Corporate FD’s are unsecured in nature but many investors including senior citizens like Damyanti Vithalani  invested lakhs of rupees due to the goodwill of the Prestigious Birla Group. However, Yash Birla is more known for its lavish lifestyle on Page3 parties instead of his business moves, which shows the careless attitude of the group. The promoter’s stake in Birla Power Solutions is only 1.08%. It shows that the promoter himself lost faith in his company. For FY2013, Zenith Birla India reported a net loss of Rs44.62 crore while, during the June 2013 quarter it widened to Rs19.52 crore.


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41 Comments
u k saluja

u k saluja 6 days ago

There is nothing like "Corporate Deposits Streamlined". It is just an eyewash. Companies like Micro Technologies India Limited, AVON Corporation Limited, Plethico Pharmaceuticals Ltd., Mumbai are not paying back money to their matured FD Holders on the committed dates. Micro Tech.& Avon gone into liquidation thus duping their FD holders of their money. Cases gone to MCA/Prov.Liquidators. Petitions being submitted. Only God knows when will be money be refunded or not. Plethico using money for 16 months and paying interest for 12 months. Streamlining is just on paper. Reality is some thing else. Lack of control by concerned. Companies managements taking people, especially senior citizens for a ride. AVON was extending validity of FDRs from 1 to 5 years on their own. There is no control or guidelines for such audicity on the part of such unprincipled managements. Why should action be delayed on such people. They should be blacklisted for managing any other companies and no loans should be given to people at the helm of affairs of such companies. Thanks.

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Parag Shah

Parag Shah 2 weeks ago

Hello, for Fix Deposit it is ok. But what about share holders? Who put trust on company's management and bought shares on higher price and now it's running in Paise from Rupee? Kindly guide if something can happen for shareholders.

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u k saluja

u k saluja 2 weeks ago

You have done very well by highlighting case of Yash Birla paying money to Mrs. D.Vithalani. Now please highlight cases of companies like Micro Technologies India Limited and AVON Corporation Limited and Plethico Pharmaceuticals show are not paying back either the principal or interest to their matured FD Holders. It will be a great service to senior citizens and others who are suffering because of high-handedness of such companies. Thanks. uk saluja New Delhi.

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u k saluja

u k saluja 1 month ago

It was very informative and heartening to read article about Mrs D.Vithalani getting her money against fds given to Yash Birla Company. Despite following up the identical procedure it has not been possible to get my money from companies like Micro Technologies India Limited and Avon Corporation Limited, Mumbai for which fds were promoted by Bajaj Capital Limited, New Delhi. MCA Status reports are either case "closed" or "work in progress". Companies still not paying either the principal or interest amount despite emails/telephone calls to them against matured fds for the last over four months. Plethico not paying interest amount for almost four months. Now Micro Technologies and Avon Corporation Ltd. are informing appointment of Prov.Liquidators in their cases. FD Holders suffering in the hands of managements of such unpricipled companies. Ministry of Corporate Affairs/Press/TV Channels must come to the rescue of senior citizens and others suffering because of such companies.

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u k saluja

u k saluja 1 month ago

i would like to suggest that cases of senior citizens should be taken up by fast track courts to be set up in the offices of Ministry of Corporate Affairs/Company Law Board where the companies have not paid back money against the fixed deposits given to them for a specified period. Money must be returned to the senior citizens after the maturity of the agreed period of FD and must not be delayed under any circumstances by the concerned companies on flimsy grounds like non receipt of funds against their exports etc. as being given by companies like Plethico Pharmaceuticals Limited, Indore/Bombay. Other companies like Micro Technologies India Limited and AVON Corporation Limited, Mumbai have failed to return money against matured FDs to their investors. Despite CLB orders money has not been paid back to its investors. Managements or the FD Promoters like Bajaj Capital Limited are non-committal about the dates by which the money would be paid back to their small-time investors. uks

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JGC

JGC 1 month ago in reply to u k saluja

Dear U K Salujaji, You are 110% right. But Company Law Board is safeguarding COMPANY's as per their name. I already had mentioned only way's are file Police/Civil & Cases as per section 138 (if cheques are bounced)needs to be filed against Company, Directors, Chair mans & CEO's of the company who have duped your money. Seems there is no one out there to listen to Senior and good citizens who have lost Crores of rupees to these white colour chits under the shelter of appropriate authority.

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