Prithvi Information Solutions, the Andhra Pradesh based IT company, which had attracted many foreign institutional investors, has now had the ignominy of having the assets of its founder, Madhavi Vuppalapati auctioned by the Sheriff of King County, US, to recover over $17million owed to Kyko Global
On 24th April, the Sheriff of King County, US will sell personal assets of Madhavi Vuppalapati, founder of Prithvi Information Solutions Ltd, a listed company, to recover over $17 million owed to Kyko Global Inc a Canadian company. Kyko Global had alleged that Prithvi and its affiliates created fictitious, counterfeit customers to get an advance payment of $17 million from them. Interestingly, while such drastic action has been initiated overseas, there isn't a peep from the Indian regulators -- the Securities & Exchange Board of India (SEBI) or the Ministry of Corporate Affairs (MCA) or even the serious frauds office. The Indian media too, barring this publication, has been completely silent. The only sign that things are drastically wrong with Prithvi Info is the dive in its share price to Rs6.50 from Rs14, its 52-week high, reached on 1 November 2013.
As for the auction at King Court, the Sheriff's office had issued a notice on 14 April 2014 about the sale of personal property of Madhavi Vuppalapati. The property to be auctioned includes rights, title and interest to Vuppalapati's silver coluured 2006 Lexus RS4005D, jewellery, miscellaneous household items, an American Eagle 1/10th ounce gold coin in box, $50 American Express gift cheque, and assorted gift cards in red box. The Sheriff will also takeover Vuppalapati's 345 share certificates in Prithvi Catalytic Inc, which are listed for sale on 29th April. Prithvi Catalytic, formerly known as Catalytic Software Inc, was brought by Prithvi Info in 2010. Last month, the US Bankruptcy Court for Western District of Pennsylvania, while warning Prithvi Catalytic not to use name change to conceal its status as a chapter 11 debtor, allowed it to change its name to Abilius. (How & Why Prithvi Catalytic changed its name to Abilius)
While the auction is serious ignominy for the Hyderabad-based company, it is unlikely to recover even a fraction of the sum owed to Kyko Global, which had filed a case of fraud against Prithvi Info in Washington. In its order on 6 September 2013, the US District Court in Seattle said, “Judgment should be entered against Prithvi Information Solutions Ltd, Prithvi Information Solutions International LLC, Prithvi Catalytic Inc, Prithvi Solutions Inc, Madhavi Vuppalapati, DCGS Inc, Inalytix Inc, Avani Investments Inc, Ananya Capital Inc, EPP Inc, Financial Oxygen Inc, Huawei Latin American Solutions Inc and L3C Inc in the amount of $1,75,68,854 plus prejudgment interest accruing at the rate agreed to between the parties at 2.45% per month in the total amount of $7,96,776, as confessed to by the Defendants.”
In November 2011, Kyko said it entered into an agreement with Prithvi for certain factoring services. As per their agreement, 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. This was in exchange for a portion of the amount outstanding from its customers to be paid immediately by Kyko.
Prithvi Information Solutions claimed to have a number of customers who had availed its services, but they turned out to be completely false. The court documents list out some of the companies that were falsely misrepresented, including big names in business, like Dick’s Sporting Goods, Enterprise Product Partners, Financial Oxygen, Huawei, and L3 Communications.
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. When Kyko requested Madhvi Vuppalapati to be put in touch directly with the representatives of the five clients, she turned down the request saying that it will be detrimental to their relationships with these clients.
Over the next two years, Vuppalapati and her associates continuously deceived the unsuspecting Kyko, in the process and kept them in the dark, Kyko alleged. Finally, while attempting to collect outstanding dues, Kyko came to know, through its own internal investigation that Prithvi had created fictitious customers to deceive Kyko and extracted more monies from it.
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. The court immediately issued an order temporarily restraining 19 companies and individuals, including Madhavi Vuppalapati, her husband, Anandhan Jagaraman, Prithvi Information Solutions and others, from 'transferring, liquidating, converting, encumbering, pledging, loaning, selling, concealing, dissipating, disbursing, assigning…' all of their assets. This Order freezing the assets also applied to third parties such as banks or other financial institutions.
On 8 August 2013, Kyko moved the court for issuance of judgement in amount against defendants in pursuant to confession of judgement and the motion was granted by the court.
In September 2013, Kyko filed a Writ of Garnishment against Prithvi Information Solutions. Kyko claimed damages of $18,431,765.90 ($18.43 million) inclusive of balance of judgement, prejudgement interest and interest of judgement from 9 June 2013 to 23 September 2013.
Earlier this month, the Bankruptcy Court in the US directed Madhavi Vuppalapati to make herself available for an examination under the Federal Rule of Bankruptcy Procedure before 8 May 2014.
In January, Kyko Global filed an application before the District Court at Ranga Reddy in Andhra Pradesh seeking execution of a decree sanctioned by the US District Court.
In the petition Kyko Global said that pursuant to a judgement by the US District Court at Western District of Washington, Seattle, Prithvi Info entered into a settlement agreement and agreed to pay $18 million to the company. Following this agreement, the US District Court on 6 September 2013 ordered a judgement be entered for $17.57 million, plus prejudgement interest accruing at the rate agreed to between the parties at 2.45% per month in the total amount of $796,776, as confessed to by Prithvi Info Solutions.
Kyko Global sought attachment of Hyderabad-based Prithvi House, the registered office of Prithvi Information Solution.
As Madhvi Vuppalapati failed to make the payment to Kyko, on 12 February 2014, the Court sent notice directing Sheriff to do auction and sell her personal assets including her Lexus car, jewellery and miscellaneous household items.
Read more stories about Prithvi Information Solution and its frauds here,
For FY2014, VST Industries reported a 19% higher net profit on higher sales and lower excise duty
VST Industries, the Hyderabad-based cigarette manufacturer, reported a 19% higher full year net profit on higher sales and lower excise duty.
For the 12 month to end-March, VST Industries said its net profit increased 19% to Rs150.15 crore from Rs126.25 crore while its total revenues, including sales, grew 18% to Rs789.17 crore from Rs668.68 crore in the year ago period.
During FY14, the cigarette manufacturer said it paid 12% lower exercise duty of Rs842.04 crore compared with Rs957.39 crore. VST Industries paid 51% duty on gross sales of Rs1,626.72 crore in FY14 compared with 59% on gross sales of Rs1,621.09 crore in FY13.
As on March 2014, FIIs shareholding in the VST Industries grew to 11.58% from 9.59% in the same period a year ago. While, domestic institutional investors (DIIs) shareholding fell to 14.94% from 15.22%, public shareholding fell to 41.32% from 43.03%. However, promoter shareholding remained at 32.16%.
VST Industries, in its quarter to end-March posted 49% higher net profit to Rs51.89 crore from Rs34.74 crore. Its total sales grew 18% to Rs189.08 crore from Rs160.86 crore in the year ago period.
VST Industries declared a final dividend of Rs70 per share.
Earlier in the day, VST Industries hit its 52-week high at Rs1,924.90 on BSE.
At 3.15 pm Wednesday, VST Industries was trading 6.70% up at Rs1,900 on the BSE, while the S&P BSE Sensex was marginally up at 22,885.
For more stock results, check out this page
There is expected to be a surge of new variants and even lower prices, around and after the elections. Increasingly, petrol cars appear better options
In the eternal petrol vs diesel debate, a diesel car commands a higher premium because it offers better fuel economy and, often, also a low RPM torque and grunt, thanks to turbo-chargers (economisers). But we now have some factors which may, possibly, swing the choice back to a petrol-engine car.
The numbers on initial cost versus fuel economy are based on personal as well as geographical parameters and the specific vehicle; these will depend a lot on your usage patterns, so please do this math for your own specific situation.
1. The cost of maintenance, wear-and-tear of tyres and high cost of consumables favour petrol cars also because petrol engines are lighter and less complicated. Petrol wins hands down.
2. Additional road taxes and PUC (pollution under control) charges and, in some cases, specific diesel surcharges, will also need to be considered. Often, there is also the need to line up with, and behind, public transport and heavy vehicles for fuel at petrol stations!
3. Resale value of petrol cars, which can be suitably retro-fitted with CNG and LPG options, is also steadily on its way up. Diesel cars on resale, on the other hand, are often viewed with suspicion—that they may have been used as private taxis.
4. And the most recent input—chances of parts swapping are higher at service stations for diesel vehicles, because that’s where much of the taxi fleet is coming from; while petrol cars are, often, private vehicles only.
There is expected to be a surge of new variants and even lower prices, around and after the elections. If you are looking at buying a new car, a petrol car may start to make more sense than a diesel one.
Resale Value Goes Up
Ihear that the resale prices of large luxury second-hand cars are reaching lower five-digit levels everyday. In some cases, it is clear that the leather upholstery and stereo alone would cost more—if there were a market for them. Well, Rs75,000 for a 10-year-old car, the replacement for which today, of the same make, same model, is over Rs15 lakh, is the lowest I have heard.
And we are talking about cars in good, and decent, running condition. The scrap value is currently around Rs35,000 per tonne of weight. This is in and around Delhi.
However, all is not lost. I have seen eminently good resale values for cars like Honda Jazz, some of the older-shaped Honda City and Maruti Swift.
Finally, Something New
There is, finally, a new technology car that excites me again—the Maruti Swift ‘Range Extender’ model, of which I was given a sneak preview (on a ‘no pictures, no take-home’ basis). Briefly, this is a smaller three-cylinder petrol engine which is all of about 660cc in size but appears to punch out almost the same in performance as what I used to achieve from the much larger one-litre engine in another car of another manufacturer that I compared it with.
But the real stuff is in the small and powerful electric motor hooked on directly to the front wheels and powered by lithium batteries. The dynamics and braking were as good as the normal petrol car and the sound levels totally zero in electric mode, just a slight whisper from outside, if you strained your ears.
As of now, I have no idea how much it will cost, though. It is likely to be introduced in a couple of months.
Veeresh Malik started and sold a couple of companies, is now back to his first love—writing. He is also involved in helping small and midsize family-run businesses re-invent themselves.