Geodesic recently held its annual general meeting. Shockingly, the shareholders found a dozen bouncers at the AGM
Geodesic Ltd, the internet software and service provider, which has run up more than Rs1,200 crore of liabilities, defaulted in repaying its foreign currency convertible bond (FCCB) holders and loans to financial institutions, recently on 10th May, held its annual general metting (AGM). One of the shareholders told Moneylife about the presence of the “bouncers at the AGM”. Instead of protecting the interest of the shareholders, did Geodesic hire bouncers to protect its promoters from the shareholders?
Nitin Rao, a shareholder, who attended the Geodesic AGM shared his expreinece on his blog: www.alphaideas.in. He wrote, “the meeting was sparsely attended by shareholders but there were around a dozen bouncers at the AGM. Either the management wanted to intimidate shareholders or they feared the proceedings will get rowdy.”
According to Wikipedia.org, bouncers (informal term for a type of security guard, employed at bars, nighclubs or concerts) are required where crowd size, clientele or alcohol consumption may make arguments or fights a possibility, or where the threat or presence of criminal gang activity is high.
“The meeting started with the chairman welcoming the shareholder who mentioned that he wanted to be upfront with the shareholders and accounts had to be restated owing to write off of receivables etc. The chairman said, FCCBs couldn’t be repaid as funds are locked into investment accounts and liquidating them now will result in not meeting their liabilites. He gave the status update of all the court cases on Geodesic. He invited the shareholders to join the Board to help the company in its time of crisis,” Rao wrote in his blogpost.
During the meeting, one of the investors from Nashik, said that, “Chairman had lied to shareholders, accounts had to be restated as all the sales were fake. FCCBs couldn’t be repaid as the money has been siphoned off by promoters and alleged that the promoters are thieves and he had lodged a police complaint against them.”
In reply, Prashant Mulekar of Geodesic, told the investor that all these were lies and the company is being harassed. Mulekar also accused the investor of filing a complaint against the promoters at Nashik. The shareholder had apparently told the police that the promoters had met him at his hotel in Nashik and encouraged him to buy shares in the company, painting a rosy picture., the blogpost mentioned.
According to Rao, at this point, shareholders sympathetic to the management, got up and alleged that the AGM could not be monopolised. They urged that the resolutions were passed quickly. There was one “investor” in particular who was a clear plant of the management, he said.
“After this,” Rao said in his blog, “all the resolutions were moved and passed with a show of hands within next 10 minutes. The proceedings took a farcical turn when some 'shareholders' went on to the stage to express her thanks for printing the company annual report on 'glossy paper'! Another wanted to go to the company’s site (property) in Uttarakhand. At the end, the company secretary announced that snacks are ready to be served which invited a headlong rush among the shareholders.”
In a regulatory filing, Geodesic said, it has adopted audited accounts for the FY2011-2013 and FY2012-2013, reports of directors and auditors along with relevant enclosures. It also re-appointed Prashnt Mulekar as director and Borkar & Mazumdar as its statutoruy auditors for next five years. Geodesic also said that it had to recast its accounts for FY 2011-12 which resulted in delayed audit for FY 2012-13.
Moneylife earlier wrote,
Crazy about “corporate governance norms”, SEBI is blind about Geodesic. The shareholders of Geodesic have already lost their value as its share prices are around Rs3 and BSE transfered it to 'T' (Trading Settlement) group. While many Shareholders who complained Securities Exchange Board of India (SEBI) about the company, the market regulator, so far, has failed to take any action against Geodesic and its promoters.
Moneylife's email to Geodesic asking, why the company needs to hire services of bouncers at its AGM, remains unanswered till writing this story. We will incorporate their views as soon as we get a reply.
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Bapoo M Malcolm
The company does not have an independent director and is not in compliance with listing norms and yet BSE does not de-list the firm! The company says it cannot find independent directors; I mean who will want to be one?!
The comments of the Hon'ble Judge in one of the many cases the company is fighting is worth noting.
Sad to say Mr Mulekar (the CFO / Promoter) comes from reputed institutes like IIM Lucknow and VJTI.