Companies & Sectors
Vikram Bhatt files police complaint against former partners Ajay Bishnoi and Amul Gabrani of Tecpro
Bishnoi and Gabrani, after taking full payment from T-Series and Reliance Entertainment for making films have neither paid the production team nor deposited tax deducted at source, alleges film director Vikram Bhatt
 
A police complaint filed by well-known film director Vikram Bhatt against the promoters of ASA Production seems set to expose a whole can of worms that could leads to Tecpro Systems Ltd, the listed company whose stock has seen a precipitous fall ever since it got listed October 2010.
 
Mr Bhatt has filed a complaint before the Mumbai Police Commissioner alleging financial fraud by Ajay Bishnoi and Amul Gabrani of Tecpro Systems, in a company called ASA Productions and Enterprises Pvt Ltd, on which he was a board member and creative director.  He resigned from the company on 30 October 2013.
 
According to Mr Bhatt, ASA set up by Bishnoi and Gabrani, was contracted by T-Series and Reliance Entertainment to produce three films and one film respectively by the two companies. It appears that neither of them were formally the owners of ASA but were represented by family members. When ASA fell into bad times, Mr Bhatt says he got film industry majors, T-Series and Reliance Entertainment to finance four specific film projects to be produced by ASA.  The money was paid to ASA, whose finances were handled by Ajay Bishnoi and his brother Anju Bishnoi.
 
Bhatt alleges that, "Anju and Ajay Bishnoi, who were handling the finance, took all the money from the partners, i.e. T-Series and Reliance Entertainment but did not make a sizeable payment to the technicians, vendors and talent of the said project and embezzled those funds. Having found out about this fraud I resigned from the company on 30th October 2013."
  
"Having goodwill and certain relationships with the said partners, T-Series and Reliance (Entertainment), I finished two of the four projects with my own personal funds, both these were with T-Series. As I write this letter, I am on the verge of finishing the last and final one with T-series," the Bollywood director, known for his horror films said.
 

He further says, "...there are scores of unpaid people including myself who are suffering due to this fraud. Mr Ajay and Anju Bishnoi have perpetrated and now the both of them are unavailable to these creditors. Not only are there unpaid parties but there are statutory liabilities that have not cleared by this company. They have deducted the TDS from the parties but in turn not paid the TDS amount to the government that then means that the parties do not have a TDS certificate. The same can be said for various Income Tax and Sales Tax issues”.
 
Bhatt further says he has also been deprived of share certificates for his holding in the company, as well as his provident fund.
 

What makes this interesting is that Bishnoi and Gabrani are the promoters of Tecpro Systems Limited, a materials handling company, which got listed in October 2010. The stock hit a high of Rs454.25 that month and has been on a continuous decline ever since. It was trading at Rs9.31 on the BSE at time of writing this piece, a fall of 98% from its high. 

 
Techpro has been a big borrower from the banking system with an outstanding debt of a massive Rs6,000 crore plus. It began a Corporate Debt Restructuring (CDR) exercise in 2014. 
 
Last month, State Bank of India (SBI) assigned all rights, title and interests in financial assistances granted by them to Tecpro Systems in favour of Edelweiss Assets Reconstruction Ltd. At one time the company had high profile investors such as London-based Indian businessman Raj Bagri, private equity firm Avigo Capital. Both exited at a loss in early 2014.  
  
In February 2015, the BSE moved Tecpro Systems’ scrip to the restricted trading segment as part of its surveillance measures.
 
Our emails sent to top executives of Tecpro Systems on 29 April 2015 remained unanswered until writing this report. We will publish their view as and when we receive it.

User

COMMENTS

vinay

2 years ago

huge money of suppliers remains unpaid for past couple of years. they have not paid salary to their employees as well

Nifty, Sensex, Bank Nifty on a downtrend – Wednesday closing report
Nifty may get support near 8,000 while Bank Nifty may fall to 17,000, if it goes below today’s low
 
We had mentioned in Tuesday’s closing report that Nifty is headed higher if it manages staying above 8,300. In line with negative closing of US indices on Tuesday and the most of the Asian indices closing in the red on Wednesday the indices back home opened in the negative and suddenly started hurtling lower. After barely half and hour, they had fallen by more than 1%. 
 
Sensex opened at 27,473, while Nifty opened at 8,317. Immediately after hitting a high at 27,501 and 8,332 the indices moved lower. At the end of the session the index hit a low at 26,678 and 8,083. Sensex closed at 26717 (down 723 points or 2.63%) while Nifty closed at 8,097 (down 228 points or 2.74%). NSE recorded a higher volume of 89.37 crore shares. Bank Nifty too lost heavily today. The index opened at 18,437 and after hitting a high at 18,580 the index moved lower to the level of 17,758 and closed at 17,800 (down 672 points or 3.64%). India VIX rose 13.27% to close at 19.6700.
 
The seasonally adjusted HSBC India Services Business Activity Index declined to a three-month low of 52.4 in April from 53 in March. On the positive side, panellists' confidence regarding the one-year outlook for activity improved, indicating that firms are optimistic the current deceleration in growth is a temporary soft patch.
 
The Real Estate (Amendment) Bill was listed for consideration and passing in Rajya Sabha yesterday, 5 May 2015, but opposition members objected to this, saying Housing and Poverty Alleviation Minister Venkaiah Naidu had assured the House that it will be brought only after consultations with various parties. The opposition parties insisted on sending the bill to a Select Committee. Sensing the mood, the government said it was not insisting on taking up the bill although it had been listed for consideration. The Lok Sabha on Wednesday passed the much-delayed and -debated Goods and Services Tax (GST) bill despite a walkout by the Congress party. The bill is likely to get support from most opposition parties in Rajya Sabha.
 
NMDC today said Life Insurance Corporation of India (LIC) has acquired almost 8 crore of its shares shares worth over Rs 1,116 crore in a market purchase. Post the share purchase, LIC's stake in NMDC has risen to 10.124% from 8.111%.
 
Ajanta Pharma rose 5.33% to close at 1411.60. It was the top gainer in ‘A’ group on the BSE. HDIL (10.13%) was the top loser in ‘A’ group on the BSE. Bharti Airtel (0.80%) was the only gainer in the Sensex 30 pack while BHEL (6.21%) was the top loser in the pack.
 
All the sectoral indices on the BSE fell, in the range of 1.65% to 4.24%. BSE Capital Goods (4.24%) was the top loser.
 
On Tuesday US indices closed in the red. Trade-deficit report indicated that the nation's trade gap hit its highest level in seven years. The widening trade deficit suggests that the US gross domestic product reading will go from a meagre 0.2% to negative territory when figures are revised later this month.
 
Asian indices which were trading today closed mostly in the red. Jakarta Composite (0.48%) was the only gainer while the top loser was Shanghai Composite (1.62%) was the top loser.
 
The HSBC China Services Purchasing Managers' Index rose to a four-month high of 52.9 from 52.3 in March, HSBC Holdings PLC said today suggesting activity outside the nation's factories improved modestly.
 
European indices were trading in the green. US Futures too were trading higher. Greece has reportedly made a loan repayment to the International Monetary Fund of 200 million euros ($224.9 million). The Greece government now faces a €750 million ($832 million) debt repayment to the IMF which is due on 12 May 2015. In the UK, Parliamentary Election is scheduled tomorrow, 7 May 2015.

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KPIT Technologies stock tanked before the results
The share price of KPIT Technologies fell sharply before the weak March quarter results
 
In just over a month, KPIT Technologies tanked 53% to Rs106 as on 30 April 2015, from Rs224 as on 3 March 2015. Prior to the results announcement on 28 April 2015, the stock had already tanked 31%. On the day after the results the stocks went down another 20% and got locked in the lower circuit. Why was there such a sharp correction before the results? There was a sequence of events that unfolded over the past two months.
 
As on 31 December 2015, the promoters of KPIT Technologies had pledged around 9.73% of their stake. On 5 March 2015, Kotak Mahindra Bank, in whose favour 600,000 shares were encumbered, released 250,000 shares. Then again on 9 March, the promoters took back another 100,000 shares pledged to the Bank, leaving the Bank with 250,000 pledged shares. By this time the stock price fell by 5% to Rs214 from the peak of Rs224 on 9 March. The release of pledged shares took place after the promoters had pledged 250,000 shares to another related entity—Kotak Mahindra Investments on 18 February. 
 
On 16 March, the technology solutions company issued an update stating their Q4FY2015 revenues will be flat as compared to the revenues of the same quarter in the previous year citing a negative cross currency impact. Further, they stated that there will be marginal growth in profit after tax for the same period. This sent the stock into another downtrend. On 19 March the stock closed at Rs182, down 19% from the peak.
 
After Kotak Mahindra Bank released as much as 350,000 shares, the promoter pledged another 60,000 shares to Kotak Mahindra Investments, increasing the number of shares pledged to the finance company to 310,000.
 
On 26 March 2015, promoters pledged 20,000 shares to Kotak Mahindra Investments according to disclosures on the BSE. On 26 March the stock price was around Rs180. Then again on 22 April, as the price move lower, the promoters pledged another 40,000 shares to Kotak Mahindra Investments. The price of the stock bottomed to around Rs153.
 
Poor results made matters worse. Though revenues increased by around 14% year-on-year in the quarter ended March 2015, operating profit declined nearly 30% over the same period. Operating profit margins which were around 22% in the previous quarters declined to 14% in the latest quarter.
 
The issue of pledged shares has gained importance after it was discovered that the entire promoter stake of the fraud-hit Satyam Computers was pledged with various financial institutions. Securities & Exchange Board of India has since made it mandatory for companies to disclose details related to pledge shares.

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