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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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23 Comments
Sandip Patil

Sandip Patil 1 week ago

Why doesn't CLB or MCA initiate steps towards arrest of Yash Birla like Sebi did for Subrata Roy? Do we wait for Modi to come to power? Even AAP instead of putting their energy in futile electioneering exercise should have helped people who lost all their savings with Private Companies in legal process. It is impossible for individual Senior Citizens to make legal fight. CLB and MCA are also not investor friendly. You can not easily find Form 4 on CLB site. Everyone is also not educated. After loosing hard earned money, people have lost faith in Ministry and Legal system. It is high time that SC should take these arrogant industrialist to task. They eat-up Banks and Investors money to make marry and are protected under the guise of Corporate Law.

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JGC

JGC 1 week ago in reply to Sandip Patil

Agree with Sandip. See there is a problem with all political parties and Not a single party is talking about many scams took place in last 2 years. I had written to Dr. Kirit Somaiya of Mumbai BJP about scam by IND SWIFT LIMITED and it's Director but no reply. Only Apex Court is working in our country. I think only way out is Investors to file Police/Court cases against such companies and their directors.

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JGC

JGC 3 weeks ago

I am also facing problem with Ind Swift for Rs. 2L. CLB has allowed 8%interest, the entire order is one sided please read carefully. I wonder is CLB Delhi authorised to reduced aggred rate of interest from 11.5 to 8%? How? CLB Mumbai has passed order to extend FDR for 2 years AT SAME REATE OF INTEREST in order against BilCare Limited.

In case of Ind swift if cheques are bounced you may file case u/s 138 against company and it's directors. We are filing the case in a day or two against Ind Swift.

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Rakesh Aggarwal

Rakesh Aggarwal 3 weeks ago

SOME PEOPLE ARE LUCKY. IN THIS CASE MY ELDER BROTHER INVESTED MONEY IN BIRLA POWER SOLUTIONS, ZENITH BIRLA, AND OTHER COMPANIES LIKE AVON CORPORATION, NESA LEIZURE, IND SWIFT LABS, RAJ OIL MILLS ETC.
RAJ OIL MILLS FD IS YET TO MATURE IN A COUPLE OF MONTHS. ALL OTHER FDS HAVE MATURED AND ALL COMPANIES HAVE DEFAULTED.
ONLINE COMPLAINTS WERE MADE TO MCA, LETTERS FROM ROC ISSUED TO AVON, BIRLA POWER AND NEESA LEIZURE WERE IGNORED BY COMPANIES. IN CASE OF AVON, THIS COMPANY HAS REISSUED FRESH FDRS UNILATERALLY WHEREBY THE MATURITY PERIOD IS EXTENDED BY ANOTHER 4 YEARS. EVEN EOW WING OF POLICE DOES NOT SEEM TO HAVE TAKEN ANY ACTION AGAINST AVON CORPN.
NEESA LEIZURE HAS INDICATED TO ROC THEY HAVE SHORTAGE OF FUNDS HENCE THEY REISSUED FDR FOR AN EXTENDED PERIOD OF 6 MONTHS. ROC HAS CLOSED FILE BY SENDING A COPY OF THIER LETTER TO US TO TAKE FURTHER ACTION IF WE SO DESIRE.
IN CASE OF IND SWIFT LAB ALSO THE FDRS WERE RENEWED AND THE COMPANY WENT BEFORE THE CLB AND GOT THE INTEREST RATES REDUCED TO 8%.
MY BROTHER IS 74 YEARS OF AGE AND UNDERGONE OPEN HEART SURGERY ON 23 NOV. 2013, HIS WIFE IS ALSO IN BAD SHAPE HAVING UNDERGONE CANCER SURGERY AND NOW ADVISED BOTH KNEE REPLACEMENT. ALL THESE FACTS WERE BROUGHT TO THE NOTICE OF THE RESPECTIVE COMPANIES WITH MEDICAL PAPERS BUT IN VAIN.
THIS IS HOW MCA, ROC ARE IN FACT PROTECTING THE DEFAULTING COMPANIES IN THE NAME OF PROTECTION OF INVESTORS. CAN ANYONE SUGGEST WHAT TO DO NOW OR HELP. IS THERE ANY PROVISION UNDER THE LAW TO RECOVER THESE FUNDS IN THIS COMPELLING CASE. MY EMAIL ID IS rakshagg@yahoo.com

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Jagdish Chopra

Jagdish Chopra 3 weeks ago

Well everyone is not as lucky as Mrs D Vithalani.
J C Chopra
S Chopra

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RAVI PRAKASH KESHARI

RAVI PRAKASH KESHARI 1 month ago

I had invested in Birla Power solution,rupee 1 lac,
nor i got maturity nor intrest from 2 years.
had made complaints in CLB and MCA,but still pending............

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