Companies & Sectors
Is High Mark Credit Info about to cease operations?

According to sources, the credit bureau has almost run through the Rs43 crore it has raised and is about to cease operations in a couple of months, unless it finds a new investor

High Mark Credit Information Services, one of the four credit information companies (CICs) in India, licensed by the Reserve Bank of India (RBI) is under a severe financial stress, following the exit of several of its top managers and the failure of its rights issue last year. Its promoter Anil Pandya, who lives in the US, is now trying to rope in a foreign rating agency to put additional capital. According to sources, the company has almost run through the Rs43 crore, it raised, and is about to cease operations in couple of months, unless it finds a new investor. As per a rights issue memorandum of SBI Capital Markets dated 11 November 2011, High Mark needed Rs70 crore to until it becomes cash flow positive sometime in 2016. The rights issue failed.


Prof Anil Pandya, chairman and founder director of High Mark, said, “High mark is raising funds to maintain its momentum in the market. As of date it has become the second credit information company, with 550 members in a short span of 20 some months.”


Inability to raise funds and deploy them to the satisfaction of its clients has meant that SKS Microfinance has suspended its relationship with High Mark. This may mean Rs4 crore annual revenue loss immediately. Prof Pandya, however, denied any such thing. In an email, he said, “SKS is a major business partner of High Mark and continues to do so”.


The other three CICs—Credit Information Bureau (India) Ltd (CIBIL), Experian Credit Information Company of India Pvt Ltd and Equifax Credit Information Services Pvt Ltd (ECIS)—have major banks and non-banking financial companies (NBFCs) as stakeholders too. Leading global credit bureaus with a long track record outside India have controlling stake in all these three credit bureaus.


High Mark received a licence from the RBI in November 2010. High Mark has invested heavily over the past four years in creating competencies' and technologies. The credit bureau has spent around Rs19 crore in building its IT infrastructure and support systems.


The Indian government on 8 September 2009 approved High Mark's proposal for foreign direct investment (FDI) of $4.74 million. At present, FDI in credit bureau is capped at 49% and any transfer of more than 5% of shares requires approval from the RBI. Similarly, institutional investment in a credit bureau is capped at 10%.


State Bank of India (SBI), Punjab National Bank (PNB), Small Industries Development Bank of India (SIDBI), Edelweiss Capital, Citicorp Finance (India), CBC Companies (US) and CRIF S.p.A (Italy), all have 9.09% stake each in High Mark. 


However, in the absence of any strategic investor acting as the promoter, High Mark is forced to look for funding from outside investors. While admitting that the credit bureau is looking to raise funding from domestic and foreign investors, Prof Pandya said, “Only CIBIL has funds. The other two (Experian India and ECIS) are also in the market raising funds. Deep pockets and ample sources of funding do not help because of the regulatory constraints on capital structure of CICs.”


High Mark’s existing investors refused to participate in the rights issue. Sources say that some of these investors are miffed at the changes at the top, such as Sidhharth Das who was the chief operating officer and Kiran Moras who was the architect of the system. They apparently had major differences with Prof Pandya.


A big bone of contention is the generous salary, bonus, perks and stock options that the board has given to Prof Pandya when he has had little operating role. Apart from a salary package of Rs60 lakh a year in 2011, he also got Rs4.27 crore as lump-sum compensation for past services including obtaining license from the RBI. During FY10, he was paid Rs1.25 crore for services rendered towards procuring the RBI license. Vepa Kamesam, a former deputy governor of the RBI is one of the independent directors on the High Mark board.


The other three RBI approved credit bureaus, CIBIL, Experian India and ECIS have received funding of around Rs50 to Rs75 crore and have access to additional funds through promoter or parent company which are large organisations specialising in credit information business mainly in the US and UK.




4 years ago

Another scam, another scam, another scam onwards. In a country without equality under law or a credible judicial system and judiciary, there can be no rule of law. Crime (including, inter-alia, corruption, reservations, rape, murder, fraud) is the order of the day. Justice by event (which, as the "Hon'ble" Home Minister is quick to proclaim will be quickly forgotten)and Justice by "fast (for media circus events only) track courts" will soon give way to lynch mobs (of which "khaps" and "sharia" courts are already two expanding facets) as an intermediate step towards violent revolution. India, presently has undone the works of such Viceroys as Bentick and Curzon and the laws drafted with such meticulous care by Macaulay to subside into a medieval "Irish Stew" from which anything might arise. From "Democratic Republic" to "Sociometricocracy" to "Fascist Omnishambles" via the "Quota-Corruption Raj" in just 65 years. "Men of Straw" such as the Indian National Congress and its many illegitimate children have taken great pains to prove Sir Winston Churchill to be a clairvoyant who puts amateurs like Nostradamus in their place.


4 years ago

Just two comments :
1. How on the earth could RBI issue a license to open a credit information bureau to a foreign national [ Pandya ]

2. How on the earth is RBI again contemplating / considering 26% stake to Italian CRIF and manage the company. CRIF is owned totally by an Italian husband and wife ! This is against RBI's own documented norms.

Wake up RBI ....This is a scam.


4 years ago

As far as the RBI license is concerned, the facts are that the application was prepared the team which included Kiran Moras. Mr Pandya was in the USA and had little or low inputs into the preparation of the application.
It is certainly not good corporate governance to pay the main promoter such a large sum to facilitate the procurement of the license as the value to the shares comes from the license to operate and is therefore not something that is being outsourced to a consultant. The payouts, in principle and the amounts are wrong and the Board of Directors must answer - specially when they have themselves got such huge number of shares. Mr Pandya should be asked to return the money to the Company.

If the amount of Rs 43 crores, being the total money spent so far, mentioned in the article is indeed true, then RBI must, as part of its powers and audit process, scrutinize this figure.

As per the Credit Information Companies (Regulations) Act, 2005, Under Chapter III, the RBI has certain powers under situations. It is for RBI to decide if this is one such situation. Section 9 (5) of this Chapter says " Where the Reserve Bank is satisfied in the public interest or in the interest of banking policy or credit system of the country, or for preventing the affairs of any credit information company being managed in a manner detrimental to the interest of banking policy or credit institutions or borrowers or clients or for securing the proper management of any credit information company , it is necessary so to do, the Reserve Bank may, for reasons to be recorded in writing , by order published in the Official Gazette, supersede the Board of such company, for such period not exceeding six months, ....."

Raj R

4 years ago

Dear Moneylife,

Thank you for sharing this.
High Mark has been a very active player in the Micro-finance Industry and also from what we hear in the traditional Banking services segment. Banks / Financial institutions have been effusive in their praise on what the company has done. Apparently this is the only truly Indian Bureau in the country which has used local technology and has robust matching engine adaptable to Indian challenges (here I don’t understand what MG says about the foreign partnership etc since all the other bureaus in this space have majority foreign ownership as well).
That aside, considering that the market has always had good things to say about the company and the team, it is indeed unfortunate that this company has to contend with someone like Mr. Pandya (from what you say and views endorsed by MG).
Can the company not do anything to eject the Chairman? Giving a large chunk of ESOP meant for the employees to the Independent directors has "Corporate Governance issues" written all over it. The story goes that Google has a motto that defines all their actions, attitude etc - "Don't be evil". Clearly, if such a motto were to be applied here, I guess the Chairman and his friends on the board will have to go.
The company apparently has more than 550 institutional members and nearly a quarter of a billion records in their database built over a 2 year period. A Bureau infrastructure is like a National Highway - equally essential to the growth of industry. It will be interesting to see how the powers that be, are able to keep this running smoothly.
For the sake of continuity and enterprise, can the management team on the ground and some of the founder employees who may have recently exited, attempt a Management Buyout instead to save this great initiative?



4 years ago

Dear Sir,

Anil Pandya has messed the place up completely. He's a devious self serving man. Greed has no bounds and he is the epitome of it. The plan was good, the team was outstanding and people worked hard. He denied the core team (Moras, Vyas & Das) a simple stake via the ESOP and they quit. There's no greater condemnation than such an action by your own team. He sat in Chicago and held a job there in a University while High Mark was being built. These guys slogged here. He got the whole thing delivered on a platter and what did he do? Gave himself a large salary plus a bonus of 4+ crore and a chunk of the ESOP. He doctored and got a friendly board constituted. He kept the board happy & gave them a generous pay out from the ESOP. Some got foreign trips. Business Class too. He debited High Mark - a company funded by PSU outfits (means Indian tax payer). How greedy/callous can one get? Pandya should be lynched. It is perhaps a borderline case if it is a profitable outfit but here, he has nearly ruined the company. He is now offering no choice to RBI and has put the officers there in a very very tough position. They will have to make an exception to keep High Mark going in the interests of financial inclusion and some such bull-shit politically friendly reason.

RBI is being arm-twisted into submission and he is delivering to some foreign (Italian too) entity a ready Credit Bureau on a platter. Indian personal info is being fed to foreigners. Mandated too. Pandya is not an Indian (he is American) and is likely to have struck a deal with the foreign company to buy him out. If/when that happens, he will encash the 4 crore of equity shares he holds (without having put in anything) - his personal pay out from the venture. To hell with the core team - suckers! Muahahahahahahahaha

Karma has strange ways to keep tabs on all of these wiley doings - it goes the long way around and gets back at you like a boomerang. Karma-phal will be delivered soon. He will have sleepless nights and ulcers and he will go twitching and writhing for actions/inaction.

If this was the guy teaching a bunch of studes in Chicago, I pity them. Waste of their money and time. He retired earlier this year (university website says Summer 2012) which means he is likely to be 65. He's done enough to earn himself money to fight the ignominy.

RBI, ROC and the Income Tax should get after this guy and audit all transactions for compliance. What a bloody let down!

The very least we should demand of him is to unconditionally step down and face an enquiry. He should also be told to return to the company the slimey pay-out of 4+ crore he gave himself out of the shareholders' equity investments. He must face a suit by the sleepy/doped out shareholders who were obviously fiddling while this hero was burning their cash for personal gain. Strangely the bugger put the bonus back into the company's equity capital. It will be justice served if that chunk of equity part can be locked up forever.

Enough said about Pandya.

WTF were the board members doing all this while? Vepa something you mention is who - a former Dy Governor of RBI? He is a board man here? To GET them a licence? Like Mr.Fix-it? What is this country coming to? Who are the other members of the board - the coterie that kept quiet while our hero looted? Who is the Company Secretary? Who are the bloody shareholders? Baap ka paisa or what?

Can you please get some information on all of these people and throw bright light so we know? At least, shame them. Their families should know and their neighbours should know. The tax payer is footing some bill I am sure. So we have a right to know. Heads must roll. Please get a list out - like a hall of shame.

India can initiate action against dumping of goods by China

As a signatory of the WTO, India can resort to anti-dumping actions, anti-subsidies and countervailing measures and emergency protection from imports

New Delhi: The Indian Government can initiate action against dumping of goods by nations like China if a complaint is made with documentary proof that such imports were hurting domestic industry, the Rajya Sabha (Upper House of the Parliament) was informed on Wednesday, reports PTI.


Replying to supplementary during Question Hour, Minister of State for Commerce and Industry D Purandareswari said as a signatory of the World Trade Organisation (WTO), India can resort to anti-dumping actions, anti-subsidies and countervailing measures and emergency protection from imports.


But "there a complaint needs to be lodged with proof that industry has been affected," she said.


Under the three agreements, action can be taken against dumping (selling at an unfairly low price), subsidies and special countervailing duties to offset the subsidies and emergency measures to limit imports temporarily to safeguard domestic industries.


"There are provisions available for action to be initiated against dumping," she said. "Since 2009, adverse effect of large imports from China on domestic industry has been established in two cases of rubber related products/inputs based on investigation and safeguard duty imposed," she said.


Purandareswari said while IIP, the index that measures industrial growth, had been fluctuating over the past few years because of global economic slowdown, it has bounced back with 8.2% growth in October.


Textiles, wearing apparel, rubber and plastic products, electrical machinery and apparatus and furniture all record positive growth in October, she said. The sectors had posted negative growth rate in 2011-12.


"The reasons for decline in the growth can be attributed to both domestic as well as international factors which include Eurozone crisis and decline in external demand moderation in domestic demand, hardening of interest rates, inflationary pressure and rising input costs," she said.


The Minister said National Manufacturing Policy, unveiled in November last year, aims to raise contribution of manufacturing in the GDP to 25% besides making domestic industry globally competitive.


She said state governments should cooperate in helping revive manufacturing sectors as land acquisition, power and other clearances "act as a drag".


SP member stuns Lok Sabha, snatches copy of quota bill from minister

Shocked by Yashveer Singh's action, which caused commotion in the House, some Congress members led by Sonia Gandhi immediately came to the Well to stop him, which created a near scuffle like situation

New Delhi: In a shocking incident, a Samajwadi Party (SP) member stunned the Lok Sabha on Wednesday afternoon snatching the copy of the quota in promotion bill from Minister V Narayanasamy and was sought to be thwarted by Congress President Sonia Gandhi, reports PTI.


The sudden action of member from Nagina, Yashveer Singh came when Minister of State for Personnel Narayanasamy was moving the bill for consideration from the second row and Gandhi, who is also the UPA Chairperson, was occupying her usual front seat.


Singh had, meanwhile, passed on the bill to his party colleague Neeraj Shekhar which fell down.


Shocked by Singh's action, which caused commotion in the House, some Congress members led by Gandhi immediately came to the Well to stop Singh, which created a near scuffle like situation. The Congress members included K Bapiraju and Vilas Muttemwar.


This was because the SP members were already in the Well in strength vociferously protesting against taking up the measure.


The situation led to a verbal spat between the Congress and SP members.


Speaker Meira Kumar was so shocked by the incident that she abruptly adjourned the House for the day. .


Amid the melee, several Congress members rushed to the Well and surrounded Gandhi in an apparent bid to protect the leader who was being questioned by SP members for thwarting Singh.


Although the Speaker left the House, the commotion persisted.


In order to calm the tempers in the surcharged House, Parliamentary Affairs Minister Kamal Nath walked up to SP supremo Mulayam Singh Yadav who was surrounded by his party colleagues including Singh.


Congress members also sought to reach out to the BJP in the wake of incident but not to much success.


Samajwadi Party has been isolated on its opposition to the Bill which will ensure quota in promotion in government jobs for SC/ST employees.


BSP supremo Mayawati, an arch detractor of Samajwadi Party in Uttar Pradesh politics, has been seeking to take credit for the passage of the bill in the Rajya Sabha.


Terming the incident as "very deplorable and extremely unfortunate", Kamal Nath later told reporters, "We will urge the Speaker to condemn it and take action against the member."


"The Bill will be taken up tomorrow when the House meets," he said, maintaining that such an act "frustrates parliamentary democracy."


Nath said since Gandhi was closest to the spot where the snatching incident occurred, she asked the member to return the papers he had snatched.


"In democracy, if you are against something, you vote against it. But you can't do this. I condemn it. If they show such an attitude, there is no need for democracy or Parliament or the media," the Minister said.


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