Regulations
SEBI's Lip Service on Governance

Market regulators unconcerned about Helios & Matheson’s shenanigans

 

Astudy by FTI Consulting on disclosure standards shows that a majority of Indian companies have a long way to go in complying with mandatory as well as voluntary corporate disclosures mandated under listing regulations. It would be interesting if another study were to check whether there are any consequences to not complying with disclosure requirements. We have observed that SEBI’s ever expanding list of disclosure requirements is so onerous that it is pushing many blue-chip companies to de-list. On the other hand, many dubiously governed companies that plan to keep raising public funds have discovered that there are hardly any consequences to non-disclosure. 
 
SEBI is so busy with its tough posturing on inconsequential issues, like mandating women directors on corporate boards, that it has no time to ensure compliance. Someone should enlighten investors how women directors will improve profitability, or enhance disclosures, when companies brazen it out, like Helios and Matheson Information Technology (H&M) and many others that we routinely report in our “Unquoted” Section. 
 
Not just the regulators, even the mainstream media is stunningly silent about H&M’s shenanigans. On 16th April, Moneylife Digital (our e-magazine) wrote about how the economic offences wing (EOW) of the Tamil Nadu police had arrested three directors of H&M for failure to repay fixed deposits and interest to hundreds of investors. Those arrested include H&M’s former chairman V Ramachandran, the company’s chief executive and managing director GK Muralikrishna, and director Diwakar Sai Yerra.  
 
It required a long effort by Moneylife to obtain a confirmation from the Chennai police, while the directors remained in custody. In Mumbai, too, a retired banker told us that he had obtained a non-bailable warrant against H&M’s directors in a cheque-bouncing case. Thousands of depositors have written to the company law board (CLB); one group has also filed a winding-up petition in the Madras High Court. 
 
None of this has been disclosed to the two national stock exchanges. Instead, H&M’s only disclosures are about its plans to start a skill development programme and that it has sought additional time from CLB to repay depositors. We know that stock exchange officials have read our report on H&M but feel no pressure to act on it. SEBI has often claimed that it intends to track social media for price manipulation through tips and rumours. Have reports about H&M, which has been extensively investigated by the regulator, missed its attention? 
 
Ours is not the only reportage available on H&M’s financial problems. A simple Google search on H&M will take you to job sites and forums loaded with angry posts from former employees who have not been paid. They say that the company seems to have no human resources department and does not respond to requests. Some anguished posts are from people deputed by Accenture to work at H&M. Through all this, H&M’s share continues to trade at a healthy Rs50+. But the regulator has no time for this; it is busy thinking of action against companies that have failed to appoint women directors on their board.

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COMMENTS

Nikhil S Girme

1 year ago

Ms Dalal,
Can we raise a PIL or something to catch attention of Media ..I mean electronic media..Do you have any contacts who can run our stort which concerns 75000 depositors with total scam amt of almost 1000 Crores ?

Pls help us

REPLY

Sucheta Dalal

In Reply to Nikhil S Girme 1 year ago

Dear Mr Girme

well, you depositors can get together and file a class action suit that is now permitted under the new companies act.

And No I have no contacts on television. May be some of your depositors who have lost money should make the time and effort to connect with media.

we are too tiny and organisation and you obviously think our way of doing things is not good enough.

Let me mention that there are so far ONLY 150 responses to the survey -- you yourself have claimed that a few hundred people have lost money in HELIOS and Matheson alone.
If depositors are too busy or unconcerned to fill out even that small survey, then are you surprised that they cannot get together to put up a fight???

Nikhil S Girme

1 year ago

Since this article has been published and all the government agencies SEBI, ROC and CLB are aware of defaults in FDs by
Unitech
Jaiprakash Associates
Plethico Pharma
Phadnis Group, Pune
Helios and Matheson, Chennai
Birla Power Solutions Ltd
Tricom India ltd, Mumbai
Elder Pharma

nothing simply nothing has moved or happened...Where should Sr Citizens go and ask for help ? Arun Jaitley is also of simply no use...He should be directing MCA to take action on these companies, recover the money of depositors..I want to knwo what was Ministry of Corporate Affairs doing when approving /regualating these FDs and when today nothing is happening they are still SLEEPING...BJP govt is on same platform as Congress Govt..Both dont want to help...

Ashok Shah

2 years ago

sucheta dalal

thank you very much for your deeply search about listed company
about crime director financial market higher authority not taken any action

so many company issue preference share pass resolution below market price company want to increase directors stack buy from stock exchange regular market but minority share holder cant do bcoz promoters have big stack so resolution pass and promoters relative price riging and AAM investor loss big
present example name of company of H n M
pl inform to us any news in H n M company or other chor company promoters

very very thanks for your search about chor promoters n financial market regulator

Nirmalya Sengupta

2 years ago

I am an anguished and distraught investor who has put hard-earned money in FD/NCD issued companies, Neesa and H&M being two of them. The money simply seems to have gone down the path to nowhere, cheques have bounced, the trustees are pussyfooting but the share prices are remaining healthy! On what basis? Who is in a better position to investigate that than SEBI? Who should these companies give priority to - those who have put in lumpsum, hard cash in their pockets or who are creating notional wealth by speculation, presumably being helped by unseen manipulations? Does SEBI have the ability to bark or is it given to bleating only?

S Majumdar

2 years ago

It is not surprising that mushrooming "Chit" Fund scheme operators are minting money. All agencies like ED, SEBI, SFIO, CLB - just name any institution and any government keep silent on such irregularities where retail investors are involved. They are active only when media breaks the news and public outcry force them to act post-facto. One can see the genesis of SAHARA, SARADHA and numerous other such scamsters fleecing public and getting away with mere time out in prison. It is difficult to accept that this is possible without connivance between both the parties. Where are the nation's custodians? What about the abject failure of Banking system is providing a bona-fide investment opportunity to micro-investors? What about disappearance of small savings organisations in the country?

Hemlata Mohan

2 years ago

In a company when an employee does not deliver, he is sent home packing. As SEBI is not doing its job- and there are a lot of instances to prove this, can anyone ask for winding up of SEBI? Why should these fatcats get their salaries from the taxpayers if they do not deliver?

Silloo Marker

2 years ago

To my knowledge, this problem is not unique to H & M. In recent amendment to Companies Act 2013, companies are required to create mortgage against borrowing. H & M being an IT company, probably did not have enough assets to mortgage, hence was prevented from raising fresh deposits (under Companies Rules 2014, art. 62, "Power to Borrow"). It seems H & M was raising fresh deposits and paying off the maturities hence landed in trouble.
Can you enlighten us with facts? My personal feeling is that filing of winding-up petitions will further damage the company and ultimately, none of the deposit-holders will get anything. A practical solution has to be found to bail out the company like in the case of Satyam Computers. Action later. Tehemton Marker

MOHAN SIROYA

2 years ago

Yes, I have experienced lack of Governance or even a desire to be investor centric on the part of SEBI.
Earlier, it used to accept Investor complaints even by email. Now no more. Even the Investor Guide operating for this special purpose does not bother. For last one week I wanted to lodge a complaint against negligence of a Registrar and Transfer Agent but now SEBI accepts complaint ONLINE only thru'SCORES .And this website SCORES is most hostile to the consumer, work erratically and seldom a consumer is successful in lodging a complaint. By not providing alternatives ,is in itself a bad Governance. And how SEBI expects that even semi-literate investors will all have computers and skills to take advantage of only ONLINE service ?

frkhodaiji

2 years ago

Ms Dalal,
Congrats on the superb work Moneylife is doing. Our family has 3 FDRs already matured.
Apart from sweet talk & letter, H&M has blatantly avoided giving us the correct picture.
As very senior citizens this is cause for grave concern for us.
Agents & brokers mouth the same sweet replies that the Company gives.
Appreciate yr championing the cause of the helpless public.
Good luck..

Anita Pai Raiturker

2 years ago

There are over 75000 depositors, most of them senior citizens who have no source of income other than the interest from investments in companies like Neesa, Phadnis and Helios & Matheson. These companies claim to have huge reserves/assets, yet refuse to pay investors their rightful interest or return the capital. What kind of governance do we have, that such companies are allowed to get away with blatant dishonesty and swindling? What is Modi's government doing about bringing such culprits to book? What faith can we place in the country's justice system when the dishonesty is obvious for all to see, yet no step is taken towards retribution? Shame on such a government that supports wrongdoers and large-scale swindlers, simply by doing nothing. Shame.

lalit

2 years ago

ALSO ELDER PHARMACEUTICALS LTD DEFAULTED FOR LAST 6 MONTHS

SuchindranathAiyerS

2 years ago

The last 65 years have established the signature Indian culture of non accountability and impunity. It would be opiate, indeed, to even begin to imagine that India's Institutions from the Courts, to the National Human Rights Commission, the Reserve Bank of India exist for the purpose for which they were set up or for any purpose other than to provide sinecures in terms of wages and etortion opportunities for those who infest them. To reenunciate the Jabberlal Dictum, "Show me the person, and I shall show you the law" of a nation that slices and dices "justice", "opportunities". "punishments" and even the right to contest elections by caste, tribe, gender, religion, vote bank, influence, power and wealth. Indian leaders are badly prepared and educated and easily fall prey to their own hubris and self image as has happened with every one of them since Jabberlal. Further, the quality of their staff has deteriorated by design far more rapidly than can be imagined by a corrosion of the education system and the corruption of the selection and promotion process by over valuing birth (SC/ST/BC/OBC etc), sycophancy, corruption and under valuing merit and competence. India is, in all ways, a victim of its own post 1947 culture, traditions and laws. In the same time that India devoted to devolving to its dregs , the rest of the World has grown stronger and evolved.

dhananjay

2 years ago

I am an ordinary depositor in Helios , i know hundreds of other depositors who are senior citizens like me . All of them are dependent on interest income to spend on their day today expenses . My question to various regulatory authorities is ... how can a company like Helios declaring reserves to the tune of 300 crores plus in their financial statements and which was initially rated 5/5 by crisil, claim not to have funds enough to honour rs 900 interest warrant ? Are the finacial statements fudged ? is the company conveniently taking refuge under changed company law excuse and using FD funds to finance projects which otherwise would have cost them higher financing costs ? Are the unmet committments made by this company to repay , being faltered more than once knowing well that there is no one who can rein in their malpratice ? If there are several companies faltering and causing trauma to depositors , was the change in rules per revised company law in the larger interests of the society ? is there any ONE in the present government , who will stand up and take action in the larger interests of community ? or is that there is not enough money in this cause for politicians and governments to take heed ?

shanti Patel

2 years ago

As Dr.Swamy told in his speech that Punish Big Defaulters-others will automatically learn the lesson. Unfortunately in our country defaulters ultimately gains and honest people only suffers
I entirely agree that this matter requires to be taken up at highest possible level and if required laws should be changed and stringent punishment should be prescribed in law and fact should be given to to the defaulters.
Moneylife should take a very sincere view and take up the matter with the finance ministry
supporting the names of companies.

Shanti Patel
Secreatry-Bombay Shareholders Association

Gandhali Girme

2 years ago

We are 75000 depositors pleading you to take the issue of defaulting corporate deposits with arun Jaitely Finance Minister.We need your help to teach these fradulent companies (Helios, Unitech, Plethico, tricome india , jaiprakash Assoc, Ansal hsg, avon corporation, Neesa group, Roofit ) a big lesson.How will you do it Ms Dalal pls..Do you need any inputs from us ? Helios you know in detail..Neesa we can help you with data..Give us an appointment..give us a strong lawyer who can fight for us..Do suggest something..Merely by exposing cos nothing will happen.You have a team of legal experts but we did not get a single strong lawyer who is with us

REPLY

lalit

In Reply to Gandhali Girme 2 years ago

Please add RAJ OIL MILLS,CHAMPAGE INDAGE LTD,MICRO TECHNOLOGIES,ANKUR DRUGS & PHARMA

Crops in 189 lakh hectare damaged due to unseasonal rains
Responding to an exhaustive debate in the Rajya Sabha on the agrarian crisis, Agriculture Minister Radha Mohan Singh said the data is based on the reports received from the affected states
 
The government on Monday told parliament that crops in 189 lakh hectare have been damaged due to the recent unseasonal rains and hailstorms in the country.
 
Responding to an exhaustive debate in the Rajya Sabha on the agrarian crisis, Agriculture Minister Radha Mohan Singh said the data is based on the reports received from the affected states.
 
"The centre took immediate cognisance of the situation and decided to relax the compensation norms for crop damage," he said. 
 
He added that Prime Minister Narendra Modi reduced the eligibility norms for compensation for crop losses from 50% to 33%. 
 
"Central government also allowed states to disburse 20% of amount available with the State Disaster Relief Fund to the affected farmers," he said.
 
The debate was taken up in the upper house last Thursday after a farmer committed suicide at an anti-land acquisition bill rally of Aam Aadmi Party (AAP) in Delhi.
 
However, dissatisfied with the minister's reply, Samajwadi Party and Trinamool Congress staged a walkout.
 
Congress also staged a walkout with Leader of the Opposition Ghulam Nabi Azad citing absence of food minister and home minister as a non-serious approach by government.
 

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Entry of foreign players in pensions may take time: Experts

The department of industrial policy and promotion under the commerce and industry notified the increase in FDI limits in line with the FDI cap raised recently in the insurance sector from the existing 26%

 

Even as the Indian government on Monday notified the raised limit of foreign direct investment (FDI) in the pension sector to 49%, experts said that there may not be a rush of new players into this sector in the short term.
 
The department of industrial policy and promotion under the commerce and industry notified the increase in FDI limits in line with the FDI cap raised recently in the insurance sector from the existing 26%.
 
As per the Pension Fund Regulatory and Development Authority (PFRDA) Act, the FDI limit is linked to the limits set for the insurance sector under the Insurance Regulatory and Development Authority Act, 2013. 
 
"The move is expected to bring in more players. This in turn would grow the overall pension market benefiting all," S. Bandyopadhyay, MD and CEO of LIC Pension Fund Ltd, told IANS over phone on Monday.
 
However industry officials said the impact of the government move will not be immediate as it will take some time for the foreign players to come into this domain.
 
According to an industry official, the Indian pension sector is currently around Rs80,000 crore and bulk of it is managed by three players -- LIC, SBI Pension Funds and UTI.
 
More than 90% of the business is from the government.
 
Including the private parties, there are seven players in the domestic pension sector licensed by PFRDA as the pension fund manager for the corpus under National Pension System (NPS).
 
The extra tax benefit for NPS subscription is expected to bring in additional business for the players, officials say.
 
Similarly allowing the employees to choose between Employees Provident Fund (EPF) and the NPS is expected to bring in more business for the pension players.
 
The FDI limit is in the forms of FPI, FII, QFI, FVCI, NRI and DR.
 
No government approval is required till 26%, but the Foreign Investment Promotion Board (FIPB) approval would be needed for investment beyond 26% and up to the cap of 49%.
 
All investments in the pension sector, however, will have to abide by the pension sector regulator, the Pension Fund Regulatory and Development Authority (PFRDA).

 

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