Consumer Issues
Micro Technologies to be wound up to repay depositors

Unable to pay its debts, the High Court had ordered that Micro Technologies deserves to be wound up and money refunded to depositors. However, small depositors are still finding it difficult to get their hard-earned money

 

The Bombay High Court has directed to wind up Micro Technologies Ltd to repay money to its depositors and lenders. However, despite filing affidavits to the liquidator’s office in Mumbai, several small depositors are yet to get a single penny back from the company or the liquidator. There is also no reply from officials of the Ministry of Corporate Affairs when small investors file multiple complaints asking their money. This has left small investors, who were lured with a higher yield for investing in Micro Technologies’ fixed deposit (FD) scheme, in the lurch.

 

Many companies, such as Micro Technologies, those belonging to the Yash Birla group – Zenith Birla (India) Ltd and Birla Power Solutions, Plethico Pharma and Ind Swift delayed the payment of interest and principal on their fixed deposits (FDs). Moneylife has written about Yash Birla group companies extensively. We received several complaints from depositors of Micro Technologies and decided to investigate.

 

Investors should have smelt something fishy when Micro Technologies started offering deposits with an interest yield of up to 14.89% in 2012. According to the company’s Annual Report 2013, the company took deposits worth Rs54 crore from investors as on 30 September 2013.

 

Micro Technologies, established itself in the software solutions space, providing security products, support systems and web-based software to its clients. The company website mentions that it won contracts for ‘Aadhaar’ and ‘City Surveillance’ projects. Further, it states that it provides security solutions to Navaratna public sector units (PSUs) as well as public sector banks.

 

The company, which sought capital from various sources, defaulted on almost all payments to not only small retail investors, but big lenders as well. After several complaints to Micro Technologies, 144 depositors filed complaints to the Company Law Board (CLB). The Bank of New York Mellon and Canara Bank also filed petitions in the High Court. After the hearings, it was ordered that Bombay High Court to be appointed as the Official Liquidator to take charge of the assets, properties and records of Micro Technologies and repay the lenders.

 

The big question is—what has Micro Technologies done with the huge deposits? On 20 July 2007, Micro Technologies made an offer to US-based banking company—The Bank of New York Mellon’s London Branch of $15 million 0.5% unsecured foreign currency convertible bonds (FCCBs) due 2012. As on October 2014, bonds with a principal amount in the aggregate sum of $12 million (Rs74.19 crore) are outstanding.

 

Similarly, in February 2012, commercial paper with a tenure of 178 days was issued to Canara Bank with a maturity value of Rs15 crore. The discounted value was around Rs14.11 crore at a rate of 13% per annum. The credit rating of the commercial papers was A1, granted by CARE Ltd. Micro Technologies filed to pay back Canara Bank. Canara Bank approached the court and on 12 June 2014, the Bombay High Court ordered that Micro Technologies should pay a sum of Rs15.91 crore and appointed a Provisional Liquidator. The equity shares of Micro Technologies were suspended for trading from 17 June 2014 based on the above court order.

 

However, pursuant to the order dated 12 June, 2014, and a notice under Rule 28 of Companies (Court) Rules, 1959 being served on Micro Technologies, it did not come forward to defend the Company Petition. On 8 October 2014, the Bombay High Court (Company Petition 190 of 2013) ruled that Micro Technologies is commercially insolvent, is unable to pay its debts and deserves to be wound up.

 

In reply to grievances received, the CLB mentions in its order that, “Deposit holders can approach the Official Liquidator, High Court of Bombay at 5th Floor, Bank of India Building, Mahatma Gandhi Road, Fort, Mumbai- 400 023 in respect of the recovery of their fixed-deposit amount and the accrued interest thereon if any payable to them, in accordance with law”.

 

NOTE:

Survey on Company Fixed Deposit (FD) Defaults

Based on scores of requests from senior citizens and others, Moneylife Foundation intends to take up the issue of non-payment of fixed deposits by companies with the Ministry of Corporate Affairs.
 
If you have invested in a company fixed deposit which has defaulted on interest or repayment, please complete this survey. Please share this survey with those who are facing similar issues.
 
Help us fight for better policies by taking this survey here Based on scores of requests from senior citizens and others, Moneylife Foundation intends to take up the issue of non-payment of fixed deposits by companies with the Ministry of Corporate Affairs.
 
If you have invested in a company fixed deposit which has defaulted on interest or repayment, please complete this survey. Please share this survey with those who are facing similar issues.
 
Help us fight for better policies by taking this survey. Here is the link
https://www.surveymonkey.com/r/Corporate_FDs

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COMMENTS

k.mohanarangam k.mohanarangam

2 months ago

thank you Moneny life for
the update

Valliappan Ramanathan

2 months ago

I AM ALSO ONE AMONG THE DEPOSITORS. I HAVE ALSO DEPOSITED A SUM OF RS.25000/- FOR A PERIOD OF ONE YEAR FROM 16.08.2012. AFTER A PROLONGED FIGHT ALSO THE DEPOSITORS WILL NOT GET EVEN A SINGLE PAISE FROM THE COMPANY. I HAVE ALSOREADY FILED A COMPANY WITH REGISTRAR OF CO MPANIES, MUMBAI. WE WILL FIGHT FOR GETTING THE REPAYMENT.

Pandurang Parab

3 months ago

Pl. keep on updating the latest news of FDs of micros .Mr.P.D.UTEKAR advocate is looking this issue for Bajaj capital . can you get some information from him.
thanks
parab

k.mohanarangam k.mohanarangam

3 months ago

as a last resort i can only rely on moneylife for any positive result
and hope moneylife will continue its crusade.

ss makhni

3 months ago

it is taking a long time to get some relief, that makes all the efforts a waste

k.mohanarangam k.mohanarangam

3 months ago

thanks moneylife for instant updates on microtechnologies
please keep it up.

k.mohanarangam k.mohanarangam

4 months ago

i am greately impressed by moneylif"s efforts to help gullible depositors like me

k.mohanarangam k.mohanarangam

4 months ago

i am greately impressed by moneylif"s efforts to help gullible depositors like me

Pandurang Parab

4 months ago

I am 70 years old citizen and deposited rs. 300000 on 11-7-2012 deposit l.f.no. 3946 in micro technologies ltd but till today I did not received any information from official liquidator HIGH COURT of Bombay office . I had submitted my details with them and also complaint through ADVOCATE P.D.UTEKAR.
Pl. help me
thanks

Sriram Ranganathan

4 months ago

If you read the judgement in the case, it is clear that no one has objected to the Official Liquidator's Report. Only an SFIO enquiry has been ordered. After almost 3 years of the event, what can SFIO find out now? So for us it seems a fruitless exercise meant to be a face saving exercise just to prove that the Directors were very honest guys and actually lost monies in business!!!! This appears fixed to investors like us.

Sriram Ranganathan

4 months ago

Bombay HC judgement in MICRO case was delivered on July 1, 2016.


IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION
OLR NO.456 OF 2014 WITH
COMPANY APPLICATION (L) NO.239 OF 2016 WITH
COMPANY PETITION NO.602 OF 2013 WITH
COMPANY PETITION NO.190 OF 2013
WITH
OLR NO.68 OF 2016
WITH
COMPANY APPLICATION (L) NO.241 OF 2016 WITH
COMPANY APPLICATION (L) NO.242 OF 2016 WITH
COMPANY APPLICATION (L) NO.243 OF 2016 WITH
COMPANY APPLICATION (L) NO.245 OF 2016 WITH
COMPANY APPLICATION (L) NO.248 OF 2016 WITH
COMPANY APPLICATION (L) NO.249 OF 2016 WITH
COMPANY APPLICATION (L) NO.250 OF 2016 WITH
COMPANY APPLICATION (L) NO.260 OF 2016 WITH
COMPANY APPLICATION (L) OF 262 OF 2016 WITH
COMPANY APPLICATION (L) NO.263 OF 2016 WITH
COMPANY APPLICATION (L) NO.264 OF 2016 WITH
COMPANY APPLICATION (L) NO.278 OF 2016
Rashmi Rajaraman v/s
M/s Micro Technologies (India) Ltd.
vrd 1/2
... Applicant ... Respondent
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OLR456.14.sxw
Bombay High Court
Mr V.L. Subramanianrajum for Applicant.
Ms Mahima Sinha with Ms Manasvi Agrawal i/b M/s Verus for Phoenix ARC P.Ltd. - Creditor – Respondent No.22.
Mr Shubhabrata Chakraborti with Mr Mantul Bajpai i/b M/s Juris Corporation – Petitioner in CP No.602 of 2013.
Mr Shakib Dhorajiwale i/b M/s Vidhi Partners for ICICI Bank Ltd. (secured ceditor).
Mr Vinod Sharma, O.L. present.
Ms Yogini Chauhan, Deputy O.L. present.
CORAM : B.P. COLABAWALLA J. DATE : 01ST JULY, 2016.
P.C. :-
1. Heard learned counsel appearing on behalf of the Petitioning Creditors, Secured Creditors as well as Depositors who all, on instructions, state that they have no objection to this OLR being allowed. In view of the aforesaid statement and considering the averments made in the OLR, the same is granted in terms of prayer clauses (a) to (d). As far as prayer clause (d) is concerned, the investigating agency SFIO is hereby appointed to detect the alleged fraud purported by the Company in liquidation on the Creditors and Fixed Deposit Holders.
2. In view of the fact that the OLR is now granted, nothing survives in the above Company Applications and the same are disposed of accordingly.
( B.P. COLABAWALLA J.)
vrd 2/2
OLR456.14.sxw
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Bombay High Court

u k saluja

4 months ago

Kindly correct the period as TWO Years instead of two months viz. the date of submission of claims to the liquidator, mumbai. Inconvenience regretted. Thanks.

u k saluja

4 months ago

What happened to the survey conducted earlier and submission made to the MCA about 6/8 months ago. Absolutely no improvement or development in the office of liquidator, mumbai in respect of settlement of claims submitted over two months ago pertaining to Micro Technologies India Ltd. and AVON Corpn.Ltd., Mumbai (both under liquidation based on orders of Mumbai High Court Judicature due to financial defaults. Appeals after appeals submitted but settlement of claims is a far cry. Sr.Citizens, sick and old housemakers suffering due to no fault of theirs.

REPLY

Sriram Ranganathan

In Reply to u k saluja 4 months ago

As far as Micro Technologies Limited is concerned, the company has been wound up as per court process. In July 2016, at the request of some depositors, the Bombay High Court has ordered that the matters relating to non-repayment of sums due to depositors be referred to the Serious Frauds Investigation Office (SFIO). This is of course a very small relief since we do not know what SFIO can find out so late in the day. The Directors & ex-Directors of Micro Technologies Limited, Navi Mumbai are leading wonderful happy lives - Dr. P.Sekhar, Mrs. Jayanthi Sekhar and Mr. Aditya Sekhar - since they have paid their lawyers big sums to get the company liquidated leaving all of us depositors in the lurch. Micro is a clear case of FRAUD and MIS-MANAGEMENT by the Board of Directors since Dr. P.Sekhar was being extolled by Forbes Magazine and 2010 and then he quietly retires knowing fully well that the company was in very bad shape, makes his son the MD and lets the liquidation happen as soon as the Bank of New York New Mellon filed before the Bombay HC for default. Clearly shows a plan, methodology and legal advice followed by the "brains" behind the huge fraud. How can all the inventory and debtors vanish into thin air, come 2013? Very fishy and reeks of corruption at every level before the liquidation was done!!

k.mohanarangam k.mohanarangam

5 months ago

i am extremely happy that shri. Saluja is corresponding with so many
agencies , administrative departments such as judiciary, ministry of finance etc I request


etc. i am asenior citizen who invested RS. 575000/ of my hard earned retirementkindly help with your kind heart
benefits with micro technologies and now languishing for my life sustenence

u k saluja

6 months ago

Grievances enumerated in the various articles by moneylife and by its subscribers for the last 3/4 yrs on the subject of non payment of money to matured fixed holders by corporates has had no effect on the concerned machinery despite submission of surveys to all concerned. Looks like these articles just for consumption/consolations of sufferers and members of their families and not for anyone who are instrumental in taking decisions for refund of money to sick and old for their small investments in companies like Micro Technologies India Ltd (promoters Dr.P Sekhar/Aditya Sekhar), Avon Corporation Ltd. (Pankaj Saraiya) and Unitech Ltd., Delhi who have not bothered to pay back money despite maturity of the fds given to them. First two companies have gone into liquidation based on orders of Mumbai High Court and liquidator, mumbai is looking into the matter for the last over two years without any tangible result in terms of payment of money to the deposit holders of such companies. Moneylife Foundation and its team have done their best by contributing articles in 2014 and 2016, conducted a survey and submitted to the concerned authorities, RTI submitted by concerned peoplo to MCA, Delhi/CLB/liquidator and submission cases to concerned authorities in Mumbai/Delhi etc. But are still waiting for some action for refund of money. It is of utmost important for all concerned including media to take up the issue and ensure that the down-trodden, sick and old are helped and their hard earned money is paid back to them without any further delay. Thanks.

Relaunched Kisan Vikas Patra promises to double money in 100 months

Finance minister Jaitley said, Kisan Vikas Patra would help poor gullible investors to channelise their savings towards trusted government scheme instead of some ponzi schemes, where hard earned savings disappears

 

With the objective to raise small savings in the country, the Indian government on Tuesday re-launched Kisan Vikas Patra (KVP), an instrument which will provide trusted option of investment to poor and keep them off ponzi schemes. Available in the denomination of Rs1,000, Rs5,000, Rs10,000 and Rs50,000, the amount invested in KVP would be doubled in 100 months. KVP, that has got no upper ceiling for investment, can be encashed after a lock-in period of 30 months. However, savers would not get any tax benefit for their investment in KVP.

 

"In the last two-three years, savings rate in country has declined from a record high of 36.8% to below 30% due to slowdown in the economy. It is, therefore, necessary to encourage people to save more," Finance Minister Arun Jaitley said during the launch of the revamped KVP.

 

KVP would serve two purposes, he said, adding, one it would help poor gullible investors to channelise their savings towards trusted government scheme instead of some ponzi schemes, where hard earned savings disappears.

 

"Secondly, there is an urgent need to raise savings in the country...These savings are then used for nation building. Such saving instruments not only earn interest but help in development of the country," he said.

 

Talking about the features of the instrument, the Finance Minister said this simple product would be a bearer instrument without name of the holder in the first phase.

 

The Finance Ministry has said that there will not be requirement of Permanent Account Number or PAN in putting money in launched Kisan Vikas Patra. There will also not be any upper limit on investment.

 

The Finance Minister Arun Jaitley and Communication Minister Ravi Shankar Prasad relaunched KVP on Tuesday. The scheme aims to boost saving and use them for long term capital requirement. "This will be a bearer instrument just like currency and easy to encash," he said.

 

Initially, the certificates will be sold through post offices, but the same will soon be made available to the investing public through designated branches of nationalised banks, Jaitley said.

User

COMMENTS

Adi Daruwalla

2 years ago

Doubling to take place every 8.33 years, in KVP. Thats too long. NSC was giving 1 and half times of capital in 6.5 years. if doubling happens in 7 years then the rate of return is good.

CBI conduct searches in Saradha, Seashore chit fund scams

The probe into Seashore Group may cause embarrassment for the Naveen Patnaik government as it had entrusted the Group with the task of executing different projects on public-private-partnership mode

 

The Central Bureau of Investigation (CBI) on Tuesday carried out searches in four cities, including Delhi and Mumbai, in connection with its probe in the Saradha and Seashore chit fund scams running into several crores of rupees.

 

The searches were being carried also at various places in Odisha and Kolkata, which included premises of some politicians as well, CBI sources said.

 

The CBI action came a day after the agency filed its second charge sheet in the case alleging that former director general (state armed police) and Trinamool Congress Vice President Rajat Majumdar and East Bengal Club official Debabrata Sarkar were beneficiaries of the money collected through the chit fund scam.

 

Others named in the charge sheet included Saradha chairman Sudipta Sen, executive director Debjani Mukherjee, a city-based businessman Sandhir Agarwal and his father Sajjan Agarwal, and Assam-based singer Sadananda Gogoi.

 

It also names four Saradha group companies Saradha Reality India Ltd, Saradha Tours and Travels Pvt Ltd, Saradha Housing Pvt Ltd and Saradha Garden Resorts and Hotel Pvt Ltd.

 

Details about the searches at various places are awaited.

 

Many political bigwigs of Odisha have been questioned by the CBI in past for their alleged role in the Seashore chit fund scam which duped thousands in the state.

 

The probe into Seashore Group may cause embarrassment for the Naveen Patnaik government as it had entrusted the Group with the task of executing different projects on public-private-partnership mode.

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