Moneylife Impact: Ministry asks SFIO to look into Helios & Matheson; ROC in 3 other cases
Moneylife Digital Team 18 April 2016
MCA has responded to Moneylife Foundation's survey and memorandum of 1,500 plus complaints by asking the SFIO to examine non-payment of FDs by Helios & Matheson. In case of Jaiprakash Associates, Unitech and Plethico, the MCA has asked ROC to examine findings from the Moneylife Foundation
Acting as a mere post office, the Ministry of Corporate Affairs (MCA) forwarded a Memorandum from Moneylife Foundation highlighting the plight of over 1,138 aggrieved investors in corporate fixed deposits (FDs) to the Serious Frauds Investigation Office (SFIO), as well as, to its regional offices for further probe, reveals a reply received under the Right to Information (RTI) Act. The Moneylife Foundation compendium represented an analysis of 1,596 complaints, which was sent along with the names, details and numbers of investors, mainly senior citizens, who have been cheated by these companies.
Unfortunately, the MCAs attitude reeks of utter callousness. Nobody from the Ministry bothered to respond to Moneylife Foundation's Memorandum, although it was sent to the Minister as well as Secretary in-Charge. It is only when we followed it up by filing an RTI application we got responses from the Ministry. This means that the battle for investors is far from over. Affected investors or Moneylife Foundation will now have to pursue the matter with SFIO and the regional offices to keep up the pressure and ensure there is some action.
Here is what the MCA has informed us through various RTI responses. On 8 April 2016, a letter to Moneylife Foundation told us that the complaint and memorandum has been forwarded to SFIO "for necessary examination and incorporation of findings thereof in investigation report". However, the note attached to it indicates that the action is with regard to Chennai-based Helios and Matheson Information Technologies Ltd (H&M).  A note put up by the joint director for instructions says, "It is alleged that the subject company is cheating people by collecting fixed deposits from them u/s 58A of the Companies Act".
In January 2016, the Madras High Court ordered the liquidation of H&M and appointed an official liquidator. The hard-hitting Court order noted that the company had siphoned off funds, 'appears unreliable' and 'cannot be believed any further'. The HC had also directed an investigation by the SFIO in this case. However, the company had obtained a stay on the matter.
Separately, the MCA had forwarded complaints against three other companies to its regional offices, where the head offices of these companies are located. This includes Jaiprakash Associates (forwarded to ROC, Kanpur), Unitech Ltd (to Regional Director for North Region) and Plethico Pharmaceuticals Ltd (to Regional Director for North West Region). There is no information available yet on two other companies that formed part of our memorandum, namely, Elder Pharmaceuticals and Bilcare Ltd. Interestingly, complaints about both these companies and others in our list continue to pour in from hapless investors.
In the Jaiprakash Associates case, the same letter also includes one complaint forward by the Prime Minister's Office (PMO) with regard to the company as well as BL Kashyap & Sons Ltd. In this case, however, Anshu Tandon, Assistant Director, MCA, has asked for a report on the violation in 30 days. This letter is dated 4 April 2016.  Significantly, in the case of Unitech, forwarded by us, the same Mr Tandon merely says, "advise you to direct to inspection officer to examine complaint during course of inspection". Clearly, there is no plan to hurry up or focus on quicker redress.
Moneylife Foundation's compilation showed that H&M accounts for the largest number of 
complaints. Besides H&M, companies, which have a large number of complaints are: Elder Pharmaceuticals, Jaypee Group, Unitech, Plethico Pharmaceuticals and Bilcare Ltd. The other companies were: Neesa Leisure, Phadnis Infrastructure, Micro Technologies, Jaypee Infratech, Yash Birla group of companies and Omnitech Infosolutions.
The survey found that a majority of the aggrieved depositors choose to complain to the company itself, which is pointless. The Company Law Board (CLB), MCA, economic offences wing (EOW) and the Securities & Exchange Board of India (SEBI) are the regulatory agencies with whom they should seek to get their grievance redressed. 
The survey found that a mere 2% of the complaints made to the companies were redressed. A whopping 83% were unresolved, while others did not complain. Repeated phone calls, e-mails and sometimes even personal visits and pleading to these companies have not yielded any results. Many companies and their officers do not revert to the depositors. Some of the companies give repeated extensions for the due date of principal and interest, but they are not repaid even after the extension date elapses.  
Based on the findings from the Survey, Moneylife Foundation sent a Memorandum to Arun Jaitley, the Minister of Finance and Corporate Affairs. Below is the copy of the Memorandum...


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Based on feedback and response from scores of citizens to our earlier survey on corporate FDs, Moneylife Foundation is looking at the feasibility of filing a class action for non-payment of fixed deposits. A dispute before the National Consumer Disputes Redressal Commission (NCDRC) requires the dispute value to be above Rs one crore. For starters, we are collecting data for SIX companies mentioned above.

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Vinayak Mahamunkar
7 years ago
Thanks to Money Life for taking up this issue.
Rajesh Ramakrishnan
8 years ago
Kudos to Moneylife for taking up this issues at various forums

8 years ago
Your organisation rightly founded lack of Knowledge where to complain if it is not the right place no action would be taken semirally we complain in the matter of co-operative to JTR and then concerned minister and then in to the HC once u r application entered in HC all fuctionarise close the door till court of law decide the case and it is the TIME we purchase BRIBE to settle and make corrupt more corrupt/CREATING market for corruption. 'The survey found that a majority of the aggrieved depositors choose to complain to the company itself, which is pointless. The Company Law Board (CLB), MCA, economic offences wing (EOW) and the Securities & Exchange Board of India (SEBI) are the regulatory agencies with whom they should seek to get their grievance redressed.
Srikanth Matrubai
8 years ago
Thank you very much again.
One of my relatives has invested in many of these companies FD and another which is not mentioned here, namely NEESA LEISURE LTD.
Please follow up on NEESA LEISURE LTD.
That company seems to politically backed too and is not caring to reply (as expected, of course)
Hiten Mehta
8 years ago
Nikhil S Girme
8 years ago
Yes Sucheta Maam ,we totally agree on the points raised

Will request your colleague Mr Sapkal to share which media houses were interested in story so that we follow up with them directly

Thanks again for the sincere help

Nikhil S Girme
8 years ago

nikhil girme ‏@fourthlife 2h2 hours ago Haveli, India
#arunjaitley 75000 Srs, 5000 crs, 1000 requests on non repayment of deposits by Helios,Neesa,Phadnis,Unitech .MCA,SEBI,ROC role ?
Nikhil S Girme
8 years ago
Ms Dalal and Mr Yogesh Sapkale

We still await media interviews your team was trying to help us with.
Could you pls look into it again Yogesh Sir ?
We are desperate for the same and need your focused attention
We need media exposure to expose these companies

thanks again !
Sucheta Dalal
Replied to Nikhil S Girme comment 8 years ago

Mr Girme ... we were not trying to canvass media interviews. It was the media that showed interest and did not follow up.

We will not be pushing for other media to report. That is something you and your group that has lost money ought to be doing !! We are already doing way beyond our best -- especially when we do not recommend that people invest in unsecured corporate fixed deposits, just to get 1 - 2% more of interest!
The risk to hard earned money is too high!
shanti Patel
Replied to Sucheta Dalal comment 8 years ago
Sucheta is perfectly right. The people who are affected should take up the matter with media and expose such management. CNBC BAZAR has such programme-PAHEREDAR.
THey should form a group and meet the concern Minister and talk through influential Member of Parliament.
Lastly prevention is better. Investors should not be GREEDY. For getting little more interest they are risking the PRINCIPAL.
Joint Hon.Secretary-Bombay Shareholders Association
R Balakrishnan
8 years ago
Senior Citizens have to look before they leap. If someone gives something extra, just think why are they doing it? And is it worth risking a lakh of rupees for an extra two thousand rupees? Stick to safety. Well known names. IF IN DOUBT, avoid. And, open up. Do not keep everything a secret till you lose money.
Replied to R Balakrishnan comment 8 years ago

Perhaps, senior citizens ought to look & simply refuse to leap.

Senior citizens may consider the following suggestion:

1) Put 85% of their savings in a 3 yrs Bank FD & invest the balance 15% in direct equity / equity mutual funds.

2) 100% Capital protection as - In 3 yrs Principal + Interest for 3 yrs on FDs will be little more than their original capital &

3) holding on to their equity investments for 3 yrs in all probability may surprise them pleasantly

Abhishek Patil
8 years ago
Thank you so much Team moneylife for helping people. Sadly, most of the people who put money into these corporate FDs are senior citizens who put their retirement money into corporate FDs. Its disheartning to see these senior citizends putting their queries on online blog based forums and awaiting response. Some of them are in desperate need money for medical treatments.

Its also highlights importance of Investement Seminars held by Moneylife foundation for Senior Citizens. I wish similar seminars can be made mandatory before claiming retirement funds.
8 years ago
So many hapless depositors don't know to whom they should approach; they are searching & finding Cos' addresses from offer documents & repeatedly sending remainders, with out any use. In this context, your work is most commendable.
Hiten Mehta
8 years ago
Thank you MoneyLife, registrars like RR Investment who offer such schemes are not replying and you are doing great work.

Hope we get H & M money back with the efforts.


Nikhil S Girme
8 years ago
Break through to some extent !! Thanks Money Life Team and Ms Sucheta Dalal in particular for taking up our requests and being extremely patient with we depositors

Do continue the good work Money Life

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