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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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45 Comments
laxminarayanbansal

laxminarayanbansal 5 hours ago

sir,
our caseis same. our invest in neesa leisure ltd,company FDR rs.28 lakhs. we complaint to CLB mumbai. and hearing on our cases on 23/07/2014 and order passed from CLB to repayment in one month on date 23/08/2014 till. but not paying to company our deposit returen till today. plz suggest to we are doing? plz help us.laxminarayan bansal

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u k saluja

u k saluja 2 weeks ago

It is a sheet waste of time offering comments on the working of companies like Micro Technologies India Limited and AVON Corporation Limited not paying back money to their matured FD holders. Companies gone into liquidation and Prov.liquidators appointed. Top management people behaving like spectators after having duped old and sick of their hard-earned money. Bajaj Capital limited who were promoting such companies for fixed deposits doing some work which is only an eye-wash by submitting affidavits of debt to CLB/MCA etc. Petitions submitted to CLB/MCA not heard and routine replies given are either cases closed or work in progress. Poor investors at the mercy of unethical and unprincipled managements of such companies who are hands in glove and cheating old and sick and making their lives miserable. No one there to help. Articles written for just time-pass and no action taken by anyone.

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Sucheta Dalal

Sucheta Dalal 2 weeks ago in reply to u k saluja

Mr Saluja. It is nice that you read Moneylife and make the effort to post.

However, your last line about "articles written for just time pass" is rather strange.
We, through Moneylife Foundation, spend a lot of time education people about the risks of Fixed Deposits. We also tell them not to fall for a slightly high return because the entire capital is at risk.
People like you need to attend these FREE seminars or watch the videos ( foundation.moneylife.in under Events : look for How to be Safe & Smart with your money) rather than expect others to fight YOUR battle after you have lost money.
That cannot happen anywhere in the world.

WE do this FREE financial literacy at a big cost in terms of time and energy ! Make use of it while it exists. Many people already tell us it is a thankless effort …

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u k saluja

u k saluja 2 weeks ago in reply to Sucheta Dalal

Thanks for your prompt comments. I do appreciate the work being done by you. You have written about the case where the money was paid by the Birla Group Company. It would be for the benefit of the masses if articles are written where the money has not been paid by companies despite best efforts made by all concerned. Why should we allow such unethical and unprincipled managements to go scot free by duping sick and old of their hard-earned money when they need it the most during the last leg of their journey. Thanks.

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u k saluja

u k saluja 1 month 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 1 month 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 1 month 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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