Anupama Yellajoshyula, a US citizen holds a hefty 25% stake in the scam-ridden Prithvi Information Solution. Is she holding this stake on behalf of the promoters whose stake is down to just 6.42%?
Prithvi Information Solutions is a beleaguered Andhra Pradesh IT company that had once attracted many foreign institutional investors. In recent years, it has been sued by business associates in the United States. All along, the company's promoters have been thought to be Madhavi Vuppalapati and her brother Satish Vuppalapati. It is they who have dealt with local and international investors. Well, it now transpires that one investor, Anupama Yellajoshyula holds almost 25% or the largest stake in the troubled company. And yet, there is very little or no information about her or the funds that she brought in to purchase these shares.
Anupama Yellajoshyula, a US citizen, is the wife of Srikanth V Swarna, the president and chief executive of Agadia Systems Inc, which provides cost effective solutions for healthcare management in the US.
Interestingly, Anupama, the largest stakeholder, is shown as “public” holding more than 5% of the shares in Prithvi Info Solutions. At the same time, the company promoters, Madhavi Vuppalapati and her brother Satish Vuppalapati together holds just 6.42% in Prithvi Info as on 31 March 2014.
In September 2012, Anupama Yellajoshyula and one another shareholder, Sarat Kumar Addanki were allotted shares under preferential allotment as the 'non-promoter group'. Through these allotments, Anupama bought 86.47 lakh shares (24.99% of total shares) having a face value of Rs10 each with a premium of Rs16 for Rs22.48 crore while Sarat Kumar bought 78.80 lakh shares (22.77% of total shares) for Rs20.49 crore during September 2012 with one year lock-in period. Why did they invest money into this company?
As per the shareholding pattern filed on the exchanges, Sarat Kumar Addanki and Anupama Yellajoshyula are shown under the 'public category holding shares more than 5%'. The promoter holding at 21.02% as on June 2011, fell to 10.98% in September 2011 and a low of 6.42% in March 2014. Madhvi Vuppalapati is a foreign promoter and holds only 0.47% and her brother Satish Vuppalapati is Indian promoter holds 5.95%.
As per the company's listing agreement, on 8 October 2012, Anupama Yellajoshyula has made disclosure under regulation 29(1) of the SEBI (Substantial Acquisition of Shares & Takeover) Regulations, 2011 to the exchanges.
One of the descrepancies, is declaration of foreign national status of Anupama. Anupama Yellajoshyula holds a US passport no4836****2 issued on 23 May 2011, which is valid till 22 May 2021. The passport clearly mentions her as citizen of the US.
But a company secretary issued a certificate to Anupama Yellajoshyula in December 2013 that shows her as a resident of Hyderabad, India. However, just a year before, during October 2012, the company secretary in a letter to Anupama Yellajoshyula, allotting her shares on preferential basis, stated her address from New Jersey, US.
Then there is a question about the money that was used by Anupama to purchase the stake in Prithvi Info Solutions. According to our sources, there is no trace of the funds that were sent from the US to India to purchase these shares. Will market regulator Securities & Exchange Board of India (SEBI), the ministry of corporate affairs (MCA) or Serious Frauds Investigation Office (SFIO) wake up and look at this brazen scam?
There may be another angle to the story. As reported by Moneylife, in November 2011, Prithvi Info Solutions entered into an agreement with Kyko Global Inc, a Canadian company, for certain factoring services. Prithvi was to sell to Kyko some of its customer account receivables for IT services and authorise direct payment on those customer accounts receivable to be made to Kyko.
When Kyko tried to contact the alleged customer companies directly for payments, it discovered that some of them were associates of Prithvi, who had posed as clients and created and executed the verifications. In order to get the money back, Kyko filed a lawsuit on 16 June 2013 against Prithvi Information Solutions at the US District Court in Seattle.
As reported by Moneylife
, the Bankruptcy Court in the US has directed Madhavi Vuppalapati to make herself available for an examination under the Federal Rule of Bankruptcy Procedure before 8 May 2014. The case related to a suit filed by Kyko Global Inc seeking to recover damages of over $18 million from Prithvi Info Solutions, which was once a high flying part of India's software story and had been purchased by many top foreign funds.
Last month, the Sheriff from King County auctioned personal assets of Madhavi Vuppalapati to recover $17 million as per directions from a US District Court. Later on, April Prithvi Info was able to get the name changed, for its subsidiary Prithvi Catalytic Inc to Abilius.
Was Anupama Yellajoshyula (and Sarat Addanki) also made to believe in the 'growth' and 'business potential' story by Prithvi Info Solutions and its promoters like Kyko? Or is she a front? Then there is the question about the funds that were transferred from US to buy those shares.
Prithvi Information Solution has been shifted to 'T' (Trading settlement) group of shares on the BSE. On 1 November 2013, it hit its 52-week high at Rs14. The company's 52-week low at Rs5.10 per share was recorded on 4 July 2013.
Prithvi Information Solutions closed Thursday 3% up at Rs6.5 on the BSE, while the 30-share Sensex ended the day 1.3% down at 24,234.
Read more stories about Prithvi Information Solution and its frauds here,