While YS Chowdary is extremely wealthy, the shares prices of his three listed Sujana companies are down by 93-97% while being bailed out by banks
Prime Minister Narendra Modi on Sunday inducted 21 ministers in his cabinet. This includes Telugu Desam Party (TDP)'s YS Chowdary, popularly known as Sujana Chowdary. He is an industrialist and one of the richest members of Parliament (MPs) in Rajya Sabha with assets of about Rs190 crore. However, the Sujana group headed by Chowdary is also one of the biggest bank defaulters. Should not PM Modi, who talks about 'cleanliness' in public life all the time, ask his minister to clean his slate before serving in the government?
Citing a release issued by Central Bank Employees Union last week, Congress general secretary Ajay Maken alleged that Chowdary had defaulted on repayment of Rs316 crore taken from Central Bank of India.
Finance minister Arun Jaitley defended inclusion of Chowdary in the Modi cabinet. "They said TDP representative Chowdary has non-performing assets of his company. One of his many companies -- he is a well-known industrialist -- was making losses. One account was in difficulty. The bank restructured it; he is paying back all the instalments (and) has a regular account today," Jaitley told the Times of India.
The All India Bank Employees' Association (AIBEA), which released a list of top 50 defaulters in the country, had identified one of Chowdary's companies. The list released in December 2013, shows that Sujana Universal Industries Ltd (erstwhile Sujana Industries) with dues of Rs330 crore was one of the biggest defaulters. Of this, Rs203 crore pertained to a loan taken from Bank of India and Rs127.42 was taken from Central Bank of India.
Earlier in July 2014, while releasing list of 1,129 'wilful' bank defaulters whose loan dues were about Rs54,000 crore in Andhra Pradesh alone, P Venkataramaiah, general secretary of Bank Employees Federation of India (BEFI), has said, "Most of the companies mentioned in the list are still being run by politicians, bureaucrats and other influential persons who are blocking the recovery."
As of March 2014, Sujana Universal had long-term borrowings of Rs176.62 crore, down 7.63% from Rs191.11 crore in FY2013. However, its short-term borrowing increased by Rs23.14 crore to Rs380.01 crore from Rs356.86 crore during the same period.
Sujana Metal Products Ltd has a long term borrowing of Rs940.1 crore as of March 2014, up by Rs135 crore from Rs805.9 crore as on March 2013. Its short-term borrowing also increased to Rs687.36 crore from Rs536.53 crore, same period a year ago.
According to Sujana Towers Ltd’s annual report for FY2014, this unit was on a borrowing spree. Its long term borrowing has increased by Rs595.04 crore to Rs1,038.64 crore as on March 2014. The company attributed the huge increase in borrowing to working capital term loan (WCTL) and interest on WCTL converted as funded interest term loan (FITL) taken from banks and increase in promoter's contribution as per corporate debt-restructuring (CDR) package it obtained. Its short-term borrowing decreased 6.8% in March 2014 to Rs648.52 crore due to decrease in working capital loans following conversion to WCTL as per the CDR package.
Chowdary's Sujana group’s three companies, Sujana Universal, Sujana Metal and Sujana Towers listed on the stock exchanges. Their stock prices tell us the story of these three companies. All three have reported losses during FY2014.
For the year to end-March, Sujana Metal reported a net loss of Rs20.57 crore from a net profit of Rs41.62 crore while its total revenues fell to Rs3,394.9 crore from Rs4,247.1 crore, same period a year ago. Same is the story of the company's share price. From a high of Rs149.2 in May 2007, Sujana Metal is currently trading at just Rs3.78 on the BSE – a fall of 97%.
These companies have been trouble for decades and have been merrily taking advantage of government ownership of banks and complete lack of accountability. In 2003, Sujana Metal, the then Rs412 crore loss making steel re-rolling and casting company, obtained a corporate debt-restructuring (CDR) from its lenders. Lenders led by Industrial Development Bank of India (IDBI), sanctioned an ad hoc debt restructuring facility as well as deferred repayment of principle and interest up to March 2005 for Sujana Metal.
Industrial Finance Corporation of India (IFCI), Bank of Baroda, Bank of Rajasthan, IndusInd Bank and the South Indian Bank were part of the lenders who permitted the CDR package to Chowdary's group company.
Sujana Universal said its net loss widened to Rs6.30 crore from a profit of Rs3.4 crore during FY2014. During 2013-14, the company's total revenues increased marginally to Rs3,465.75 crore from Rs3,367.66 crore a year ago period.
Sujana Universal traded at Rs42.7 in August 2005, its highest over the past nine years. Currently, it is trading at about Rs2.55 on the BSE a fall of 93% over nine years.
During the year ending March 2014, Sujana Towers' net profit tumbled to Rs2.66 crore from Rs6.56 crore, while its total revenues declined to Rs1,823.5 crore compared with Rs1,827.1 crore in the 12-months to end-March 2013.
Sujana Towers' share price movement is also not different from its two group companies.
On January 2008, Sujana Towers traded at Rs354.3 and tumbled to a low of Rs19.4 in February 2009. In April 2014, Sujana Tower touched its lowest level of Rs7.46 over the six years. At present, the scrip is trading at around Rs16.5 level, a fall of 95% from the peak.
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Congress also has done the same with Dhirubhai since 1984 evading taxes paying Ministers its makes better sense to run India.
Today RIL/R ADAG are fortune companies are in Swan Telecom scams/RIL KG6 Vinod Rai's Gold plated agreement which we Indians are paying for gas/petrol/diesel.
Not to forget Essar Oil delisting recently.
Merger of Reliance Petroleum+RIL.
Reliance Natural resources+Reliance Power etc etc.
We need money without value systems.
CARRY ON PM INDIA IS PROUD PICTURE ABHI BAKI HAI MERE DOST ENJOY.
Mahesh
Markandeya
The entire infrastructure industry in the country has been badly affected since the melt down of the global financial markets in 2008, not only due to steep fall in material prices resulting in huge depreciation in inventory values but also dwindling business opportunities as a result of fall in fresh investments in the economy. While the private investment died down in the country due to extreme caution by the domestic and overseas investors, the Govt. policies of cutting down plan investments to reduce budget deficits made the matters worse. As a result, almost all the companies offering products or services to the infra sector faced financial crises leading to heavy losses. Manufacturing companies in combined AP and Tamil Nadu, like Sujana Group companies were further affected due to severe power cuts of over 60% and steep increase in power costs,
In order to rescue the banking sector from their entire exposure to the infra sector turning bad and to provide an opportunity to the companies in the infra sector to survive the impact of economic down turn, RBI devised ‘Corporate Debt Restructuring (CDR)’ mechanism, under which the loans are permitted to restructure within defined parameters, so that the banks are protected from the negative effects of the economic slump faced by the infra companies. SMPL and STL are among the nearly 1000 companies whose debts are restructured under CDR. The loans of SMPL and STL under the CDR are regular since implementation of the CDR package.
It is incorrect to state SUIL is a defaulter to Central Bank of India and Bank of India. The loan accounts of SUIL with these banks are regular and are classified as ‘Standard’ assets in their books.
The Group has no loans from IFCI, Bank of Rajasthan, Indus Ind Bank and South Indian Bank. In fact loan from them were closed in full more than 7-8 years ago.
It may be further added that during the last 27 years of its existence, the Group dod not seek any waivers from the banking system.
SUIL made a public issue of equity shares at par in the year 1989 and a rights issue @ Rs.17.50 per equity share in 1992. SMPL made a public issue of equity shares at par in 1992. After this, none of the Group companies raised equity from the public. The equity shares of STL, which was de-merged from SMPL through High Court approval, were listed as per the de-merger scheme. Further equity requirements of all the three companies from time to time were met by equity contributions, at varying premia, by the promoters consisting of Mr. Chowdary, his friends and relatives. A total of Rs.546 crores was invested by the promoters as equity at premiums ranging from Rs.2.50 to Rs.160 for equity share, as determined under relevant guidelines.
Most of the original shareholders had sold their shares at a profit and thus a majority of the public shareholders today in Sujana companies are those who acquired these in the secondary market. It is a well known fact that equity price movement on the stock exchanges in the country is highly speculative and depends on various factors, fundamentals of the company being only one of them. The price of equity share of STL of Rs.5 face value was at one time being traded at over Rs.230 despite there being no significant announcement by the company. The equity share of SUIL of face value Rs.10 was also traded at over Rs.80 and that of SMPL of face value Rs.5, at over Rs.50.
Investment in listed equity shares is one of several asset classes available for the investors in the country. The investors in the equity shares of Sujana companies in the secondary market, apparently took a rational decision on their own knowing fully the other opportunities for investment available in the country and as these equity shares are regularly traded, their investments were always liquid, so that they could liquidate them at anytime of their choice. However, the promoters of these companies, who invested Rs.546 crores have no such exit opportunity to liquidate their investments. They continued to invest further funds in order to meet the companies’ requirements. Thus if any share holders have really suffered huge losses by investing in the equity shares of Sujana companies, it is the promoters, consting of Mr. Chowdary, his friends and relatives.
Shri YS Chowdary hails from a rich family in AP, who have been tax payers since last three generations. He had invested in the equity of these companies and has not sold any of those shares. He is a successful entrepreneur, made lot of efforts for the progress of these companies and took a huge investment risk.
Your analysts are welcome to visit us and collect any facts in this regard.
Do not place great hopes on cleaning the body politic without cleaning up electoral financing.
the present BJP govt is no way better than cong govt but our Pm says he wants to clean but it not possible because all his ministers are tainted the present FM is minister who had argued and championed the cause for Bhopal gas targedy for which he had been heftly demanded and that is case of present BJP got old wine in an new bottle no way better than congress