Guru Pandyar, his wife Arundathi as well as Srinivas Sista and his wife Lalita filed applications for personal bankruptcy at Western District of Washington after being involved in multimillion dollar business fraud
Guru Pandyar (Prasad Rao Pandyar-Guru), his wife Arundathi as well as Srinivas and Lalita Sista, all associated with beleaguered Prithvi Information Solutions have filed for personal bankruptcy in the US.
Both the couples are named in a multi-million dollar business fraud in which Kyko Global Inc, a Canadian company, is seeking $18 million from Prithvi Info Solutions, its promoters and associates.
The Pandyar couple is director/president of Avani Investment Inc while Guru Pandyar himself is an officer of Prithvi Info Solutions and Prithvi Catalytic (now renamed as Abilius) and full time employee of various other affiliated companies of Prithvi Info. On the other hand Sista is named as director/president of Ananya Capital Inc and officer of certain related affiliates and full time employee of various other affiliated companies of Prithvi Info Solutions and Madhavi Vuppalapati, founder of the company.
Both Guru Pandyars and Sistas have filed bankruptcy petition on 17 June 2014 before the Western District of Washington. In most cases, the filing of the bankruptcy case automatically stays certain collection and other actions against the debtor and the debtor's property. Under certain circumstances, the stay may be limited to 30 days or not exist at all, although the debtor can request the court to extend or impose a stay.
The case related to a suit filed by Kyko Global seeking to recover damages of over $18 million from Prithvi Info Solutions, which was once a high flying part of India's software story and had been purchased by many top foreign funds.
As reported by Moneylife in November 2011, Prithvi Info Solutions entered into an agreement with Kyko Global Inc, a Canadian company, for certain factoring services. 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.
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. 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.
In the lawsuit, Kyko alleged that, "To further secure the amounts owed to Kyko, on or about 29 March 2013, Madhavi, Pandyar and Sista agreed on behalf of various affiliated companies of Prithvi Info Solutions to enter into a cross-guarantee promising to pay on demand the full amounts owned to Kyko. The cross-guarantee was signed by Madhavi, Pandyar and his wife, Sista and their affiliated companies, Catalytic, Prithvi Solutions, Prithvi Info Solutions, Inalytix Inc, Ananya and Avani. Each of these cross-guarantors promised 'on a joint and several basis, to guarantee the obligations of each debtor to Kyko in respect to the payments of all the accounts receivable...by each debtor'."
"In reality the cross-guarantees were yet another component of defendants' fraudulent schemes, and an attempt to conceal the scheme and ultimate truth of the scam from Kyko," the Canadian company alleged in its complaint.
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.
In the Writ of Garnishment, Kyko had named Prithvi Information Solutions Ltd, Prithvi Catalytic Inc, Prithvi Information Solutions International LLC, Prithvi Solutions Inc, Inalytix Inc, International Business Solutions Inc, Avani Investments Inc, Ananya Capital Inc, Madhavi Vuppalapati and her husband Anandhan Jagaraman, Guru Pandyar and his wife Arundathi, Srinivas Sista and his wife Lalita, DCGS Inc, EPP Inc, Financial Oxygen Inc, Huawei Latin American Solutions Inc and L3C Inc.
Earlier in April 2014, following directions from a US District Court to recover money, the Sheriff from King County auctioned personal assets of Madhavi Vuppalapati, founder of Prithvi Info, to recover $17 million.
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