The performance and stocks of the biggest companies from the city are on an endless slide amid mounting controversies of political nexus and mis-governance
While the Telangana saga unfolds, Hyderabad prepares for another battle. But the nightmares have already started for the investors of some of the biggest and most well-known Hyderabad-based companies. Many of them started with the blessings of the powerful, these ‘politically connected’ companies have failed to live up to expectations. Most of them pursue capital-guzzling projects that are difficult to execute and are destined to be value destroyers over the long term. The stocks of these companies have fallen sharply on pure mis-governance.
The canon is spectacular. GVK Power & Infrastructure, Nava Bharat Ventures, KSK Energy Ventures, GMR Infrastructure, Lanco Infratech, Nagarjuna Construction Company, IVRCL Limited and Deccan Chronicle Holdings—these are the companies that once heralded the rise of Hyderabadi businessman. They attracted many investors who were sure that the political patronage would make sure their investments multiplied. Most of these stocks have lost 80% from their peaks. Then there are companies like SKS Microfinance and Aurobindo Pharma which have plainly been mismanaged and have been savagely sold off by investors.
Since they were listed, all these stocks climbed and boomed, before they crumbled into an unceremonious heap. Just on 28 September 2010, SKS Microfinance was trading at Rs1490.70, and on 9 November 2011, it had fallen by a humungous 88%. GVK Infrastructure has seen a decline of over 87% from its all time high of Rs93.50 on 6 December 2007 and KSK Energy lost 20% on Wednesday itself; and has declined by 68% from its all time high at Rs250 on 20 May 2009. Political connections have not been able to substitute governance and financial management issues.
The coaching class took fees under the pretext of tutoring as per ISC pattern, but instead was providing tuitions based on CBSE standard
State Consumer Dispute Redressal Commission, Uttarakhand while dismissing an appeal of a coaching class asked the class to return tuitions fee and pay a fine for causing stress to the parent.
The State Consumer forum also found Takshila Institute guilty of deficiency in services. The Institute had challenged order passed by the District Consumer Forum.
Bhupinder Singh had filed a case against Takshila Institute in the District Consumer Forum alleging that the Institute failed to provide tuitions to his son as per their agreement. While taking admission for the classes, Mr Singh was promised that his son would be provided tuitions as per the Indian School Certificate (ISC) standards after paying a fee of Rs7,216.
However, when the tuitions started, Mr Singh’s son, Gagandeep, found that he was the only student in his class admitted for the ISC pattern while the rest were studying under Central Board of Secondary Education (CBSE) pattern. Mr Singh complained regarding the wrong tuitions that was being provided to his son, but the Institute paid no heed. Finally, Mr Singh approached the District Consumer Forum for justice.
On several hearings, the Institute failed to appear before the Forum and kept delaying the dates by saying that it needed time to file reply and was having a dialogue with Mr Singh of an amicable settlement of the issue. After several dates, finally the Forum proceeded with the hearing ex-parte and delivered a judgement on 25 August 2010 in Mr Singh’s favour.
Takshila Institute then appealed to the State Commission, which noticed that on several occasions the Institute failed to appear before the District Forum despite being granted time to settle the case. Takshila also submitted various documents to support its case before the State Commission.
Defending its stand, Takshila told the Commission that they had informed that the tuitions would be for CBSE pattern and not for ISC as claimed by Mr Singh. It also submitted two previous judgements to support its stand. However, the State Commission said that the two previous judgements ‘have no application to the facts and circumstances of the present case’.
The State commission observed that the institute failed to provide any document on records to prove that Mr Singh was aware that the institute provides coaching only as per CBSE pattern. It also said the institute could not provide coaching to Mr Singh's son according to ISC pattern, eventually making him to withdraw his son's admission.
Dismissing the appeal filed by Takshila Institute, the State Commission said, "The institute has committed deficiency in service and the District Forum has rightly directed the- institute to refund the fee of Rs7,216/- to Mr Singh and has also rightly awarded sum of Rs1,000/- towards mental agony and litigation expenses."