Yash Birla Group companies in deep trouble?

Moneylife Foundation has been receiving complaints from its members that they are not receiving their fixed deposit maturity amounts from two Yash Birla Group companies namely Zenith Birla (India) and Birla Power Solutions. Is there financial trouble brewing in the group?

The economic slowdown and its impact on corporate performance is now beginning to hurt investors who have trusted their money to unsecured fixed deposits of a clutch of companies. Investors are writing to us to complain that they are not getting back their maturity proceeds from two Yash Birla Group companies, Zenith Birla (India) and Birla Power Solutions.
 

The Yash Birla Group of companies has been struggling, if the share price is anything to go by. As you will see from the table below, none of the Yash Birla Group companies are quoting at double digits. Out of the eight companies, all but one gave negative returns since 1 March 2013. Is there trouble for the group that the shareholders do not know about?
 

The table below shows the stock price performance of all the Yash Birla Group companies:
 

Name of Company Share price on
1 March 2013
Share price on
17 June 2013
Share price
difference
Birla Capital & Financial Services 1.54 (2/27/2013) 0.9 (6/5/2013) -42%
Birla Cotsyn (India) 0.15 0.1 -33%
Birla Pacific Medspa 1.49 0.58 -61%
Birla Power Solutions 0.26 0.18 -31%
Birla Precision Technologies 2.7 2.99 11%
Birla Shloka Edutech 4 3.95 -1%
Melstar Information Technologies 3.95 3.28 -17%
Zenith Birla (India) 1.15 1.05 -9%


Recently, the Chennai-based Apollo Hospitals called off its joint venture with the Yash Birla Group, citing delays in obtaining approvals. Interestingly, fixed deposits-related issues plagued  Zenith Birla (India) and Birla Power Solutions. The latter had problems paying its tax dues as well.

 

According to the annual report, Birla Power Solutions not only did not issue fixed deposit receipts but the auditors also discovered there was a shortfall in liquid assets too. More pertinently, the auditors also discovered tax arrears with respect to dividend distribution tax and sales tax. However, the company admitted that the financial crunch made it more difficult to bridge the shortfall and pay taxes. It said, “The company could not pay the dividend distribution tax of Rs261.54 lakh and the arrears of sales tax due of Rs23.64 lakh due to severe financial crunch. The company will pay these dues as soon as the financial position improves.” Similarly, it could not bridge shortfall of Rs9.31 lakh due to poor economy.
 

The auditor stated in the company’s 2012 annual report: “We have to state that the company has invested Rs283.55 lakh out of the amount of Rs292.86 lakh, in liquid assets. Further there has been delay of some days in obtaining the said assets. There has also been a small delay in issue in Fixed Deposit Receipts to the extent of Rs105.98 lakh during January and February 2012 consequent to the change in the registrar of the company.”
 

Birla Power Solutions has fixed deposits to the tune of Rs57.92 crore as of 31 March 2012. The company too claims that there are no unpaid deposits. Another company, Birla Cotsyn, has Rs5.61 crore of fixed deposits with no unclaimed fixed deposits.
 

Similarly, Zenith Birla (India) too had troubles with issuing fixed deposit receipts. Last year’s annual report of Zenith Birla (India) reveals something that has relevance to fixed deposit holders of the company. Apparently, the company had failed to issue fixed deposit receipts to the extent of Rs78.16 lakh, as discovered by auditors, last year in January and February. The auditors stated: “In respect of compliance by the company with the provisions of Sections 58A and 58AA or any other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 1975, with regard to the deposits accepted from the public, we have to state that there has been a small delay in issue of Fixed Deposit Receipts to the extent of Rs78.16 lakh during January and February 2012 consequent to the change in the registrar of the company.”
 

The company defended its position by stating that the delay was due to changing its registrar. The statement said: “The company had changed its registrar to the Fixed Deposit scheme from Link Intime India Private Limited (Link Intime) to Adroit Corporate Services Private Limited (Adroit) in the month of January 2012. The company thought it prudent to change the registrar due to better services and upgraded software used by Adroit as compared to Link Intime. As Adroit had to set up the Fixed Deposit system post shifting of the records from Link Intime, there had been a small delay in issue of Fixed Deposit Receipt.” As of 31 March 2012, Zenith Birla has fixed deposits of Rs33.19 crore, but claims that it has not defaulted on them.
 

Moneylife sent an email to the Yash Birla companies for their responses. Till the time of writing the story, we have not received any answers from them. We will incorporate their answers as and when we receive them.

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COMMENTS

Nand Lal Pamnani

5 years ago

My name is Nand Lal Pamnani from Vadodara & has made following Fixed Deposits with Birla Group as under:
01) Zenith Birla (India)Ltd:
- FDR No. 52774 Dtd 20/09/10 of Rs. 1.00 Lac for a period of 3 Yrs. Already matured on 25/08/13 & amount payable on maturity is Rs. 1.38,867. Original FDR sent back through Karvy 12/08/2013. Receiving any reply from Company / Registrars on re-payment.
- FDR No. 555283 Dtd 30/06/12 of Rs. 1.00 Lac for 3 Yrs, Interest payment half yearly. No Dividend recd for 2013-14.
02) Birla Power Solution Ltd.:
- FDR No.:12180 Dtd 27/08/2011 (Non-cumulative)for 3 Yrs, Interest payable half yearly. No interest warrant for the period beyond 01/04/2012 has been received.
Though, apart from Company & Registrar, matter has been taken up with Ministry of Corporate Affairs,Delhi & Mumbai / Registrar of companies, Delhi & Mumbai and Company Law Board, Delhi & Mumbai through many mails & letters. Unfortunately none replied. EVEN NON ACKNOWLEDGED ANY CORRESPONDENCE.
हमारा भारत महान !

Gopal Sharma

5 years ago

ZENITH (INDIA) LTD. did not pay me the maturity amount of Rs. 13,88,670 due for its Fixed Deposit Scheme on 15 September. 2013. I asked PRAFUL J SHAH. (New Registrar of the scheme)
Adroit Corporate Services Pvt.Ltd. 17-20, Jaferbhoy Ind. Estate, 1st Floor, Makwana Rd.
Marol Naka, Andheri (E),
Mumbai 400059, India
His Replied was that,
"We had gone through the trailer mail. We had received the FDR for Repayment On 13/08/2013. For repayment/Int. please talk to Mr. Vinay Desai/Mr. Ansar at (022) 67933000/024/112. OR
Company Secretary MR Vimal Dubey at (022)67933062/ 09702020726.

But nobody answered my e-mails or Phone till date after repeated trials.

GOPAL SHARMA
Prof. IIT

REPLY

Vishrut Patel

In Reply to Gopal Sharma 5 years ago

How to get your money back from Yash Birla group companies?

Read Detailed Process Here,

http://www.moneylife.in/article/how-to-g...

vijay

5 years ago

where do i compliant about fixed deposit in yes birla zenith birla not refund my f.d. k.l.shelke

AJIT DINDAYAL SHARMA

5 years ago

MY NAME IS AJIT DINDAYAL SHARMA AND I HAVE INVESTED IN BIRLA POWER SOLUTIONS LTD., ON 28.10.10 FOR THREE YEARS AND FROM 2011 TO 2013 NO INTEREST IS PAID TO ME ON THOUGH I HAVE SENT MY FDR DULLY SINGED MY ME AND SENT SO MANY MAILS TO THAN BUT NO REPLY IS GIVEN TO ME CELL NO.9004468206 / 9322835183

Natarajan

5 years ago

is yash birla going to become or behave like vijay mallaya, by not payinng the money owed to the creditors

RAVI PRAKASH KESHARI

5 years ago

i had invested in Birla power solution is october 2010,company has not paid intrest of 2012-13,and now i sent it for maturity which is in dark?

Vinay Taneja

5 years ago

with so many troubles in his business and losses and unable to pay the dues....
How Mr Yash Birla looks so funky and rich ?
Yash ji please concentrate on business instead of fashion please

Gopal Sharma

5 years ago

I put Rs. 10,00,000/- Ten Lac as Fixed deposit for three years with ZENITH BIRLA (INDIA) LTD. after maturity on 15 - Sep - 2013 the amount due is Rs.13,88,670/- Company did not pay any money nor any explanation. Company has received my duly discharged receipt with its new registrar. But registrar said company is in deep trouble. What can I do to get my money?
Gopal Sharma Prof. IIT
Nilam Sharma Housewife
FDR No.52932
.

DIPAK GANDHI

5 years ago

none of my investor's have recd sofar any RP for their investment in Fd of birla power since long..so co claim is wrong..they are cheating the public..for inf of all concerned--thanks--dipak gandhi..mob--9427611361..

shantilal p shah

5 years ago

ZENITH BIRLA(INDIA) LTD,FDR NO 52881We regret to inform you that we have not received the payment of our fdr no 52881 dated 14/10/2010 for Rs. 35,000/-for 36 months, which was due on 14/09/2013.
We have already send a duly stamped and signed fdr before a month.Maturity amt is Rs.48,258/ -We request you to please send the maturity amt immediately.
With regards

SHANTILAL POPATLAL SHAH
PREMILA TRAMBAKLAL SHAH
9426585903
[email protected]
no reply from any one sice last 45 days

Vishrut Ramesh Patel

5 years ago

How to get your money back from Yash Birla group companies?

Read Detailed Process Here,

http://www.moneylife.in/article/how-to-g...

dAMU

5 years ago

Vimal Dubey "[email protected]"

BOARD of Director (PVR-Murthy)
"[email protected]"

Legal
"[email protected]"

Public Relationship
"[email protected]"

REPLY

dAMU

In Reply to dAMU 5 years ago

Ministry of Corporate Affairs, complain form (online)

http://www.mca21.gov.in/DCAPortalWeb/dca...

dAMU

5 years ago

I followed up for a month and was able to get my Rs 6-Lakhs.

I was writing email to BIRLA Board Of Director PVR Murthy

For ZenithBirla group, I was writing email to Vimal Dubey

Legal Team: [email protected]


All the emails I was cc to "Ministry of Corporate Affairs:
[email protected],
[email protected],
[email protected]

Beside complaint to MoCA, I complaint to law board, as mentioned in my previous comments.


I received my 6-lakhs, hard-way after a month of FD maturity.

manoharkantak

5 years ago

There is little hope that people will get their money back. Birlas are politically influential people, they can manipulate the law. Auditors are also hand in gloves, they get their fees.

shantilal p shah

5 years ago

ZENITH BIRLA(INDIA) LTD,FDR NO 52881We regret to inform you that we have not received the payment of our fdr no 52881 dated 14/10/2010 for Rs. 35,000/-for 36 months, which was due on 14/09/2013.
We have already send a duly stamped and signed fdr before a month.Maturity amt is Rs.48,258/ -We request you to please send the maturity amt immediately.
With regards

SHANTILAL POPATLAL SHAH
PREMILA TRAMBAKLAL SHAH
9426585903
[email protected]

Gridlock at the power centre?
Once the Smartgrid plan is implemented by Power Grid Corporation, it expects to prevent tripping and help in smooth flow of power. But, as a sequel to setting up the Smartgrid, state electricity distribution companies will have to upgrade their inter-state checking transmission systems
 
According to Power Secretary, P Uma Shankar, the southern region, which is not connected to the National Power Grid will face an estimated 26% deficit during this fiscal.
 
Power Grid Corporation of India (PGCIL) has sought the permission of the Central Electricity Regulatory Commission (CERC) to upgrade its stations to enable them to implement the Smartgrid mechanism.  This is estimated to cost Rs655 crore and may be completed in three years after receiving the approval. Naturally, this is likely to be accomplished in several phases as work progresses. Why did not think of this earlier, is another question.
 
There are five grids in operation, viz, Northern, Eastern, Western, North-Eastern and Southern.  Apart from the Southern grid, all other grids are interconnected.  This year, apart from Southern, North-Eastern grid is likely to face a shortfall of 10% while the Northern region may be hit by a negligible shortfall of 1.3%.  However, should there be a fall in power production itself, for any reason, these estimates will go haywire.
 
All these figures will change, should the government decide to come to the rescue of Pakistan and supply it the much-needed power in that country, to show our sincere feelings to establish our continued brotherly relations with our neighbour.
 
Anyway, because of the transmission constraints, there is a restriction in the flow of power particularly between the North Eastern and Southern regional grids. However, as stated earlier, this is likely to improve by next year, as per the power secretary’s statement.
 
Once the Smartgrid plan is implemented by PGCIL, for which it has sought the assistance of Indian Institute of Technology in Mumbai, it expects to prevent tripping and help in smooth flow.
 
But, as a sequel to setting up the Smartgrid, Discoms (state electricity distribution companies) will have to upgrade their inter-state checking transmission systems involving expenses, but this will reduce power outages and thefts.  Also, once the “smart meters” are installed, households can programme their electricity use and consumption is likely to come down by 20-30 units for each consumer, thus reducing the monthly bills.
 
It is hoped that CERC (Central Electricity Regulatory Commission) would whole-heartedly support and approve this move by PowerGrid, but what is lamentable is the need to seek permission to introduce such beneficial programmes to the consumer.  Public need to be served.
 
PowerGrid, and others like it, which can bring such benefits to people at large, need to be able to act independently to take such steps, without waiting for approvals!  After all, why did PowerGrid not think of this earlier? It must take immediate steps to reduce the time frame for this project from three to two years, if not less, while it awaits the approval from the CERC, which is likely to take some 30 days to give its decision!
 
(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce and was associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)
 
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BP seeks compensation from oil ministry for KG basin block
About 70% of the 1,949 square kilometres of the block falls in an area where DRDO and Navy exercises are conducted and has been classified as “Impact Zone” where oil and gas operations are not possible, BP said
 
UK’s BP plc has asked the Indian petroleum ministry to compensate for a Krishna Godavari basin block that it is being forced to surrender after defence ministry restrictions made oil and gas exploration impossible.
 
BP along with Reliance Industries had won the deep-sea KG-DWN-2005/2 or KG-D17 block in the seventh round of auction under New Exploration Licencing Policy (NELP) in 2008.
 
About 70% of the 1,949 square kilometres of the block falls in an area where DRDO and Navy exercises are conducted and has been classified as “Impact Zone” where oil and gas operations are not possible, BP wrote to the oil ministry on 27th May.
 
The block, it said, has “practically become a ‘No-Go’ zone for continuous exploration and subsequent development activities thereby preventing contractors from carrying out petroleum operations.”
 
BP vice-president (exploration) Alistair JA Bent wrote that the company appreciated that ministry of defence requirements for testing and carrying out exercises have led to the introduction of significant risk and high uncertainly beyond the control of contractors.
 
“We would therefore be prepared to relinquish the KG-DWN-2005/2 (KG-D17) block, but are happy to discuss possible options in lieu of such relinquishment,” BP said.
 
BP had written a similar letter in April.
 
Since the block size is small, flexibility to make any design changes to mitigate the impact of defence ministry requirements was severely restricted, it said.
 
BP said the block was in early stages of exploration and “any further exploration operations will be constrained as they need to be managed with respect to Naval and DRDO testing and exercises.”
 
“Even if any hydrocarbons are discovered, those cannot be produced as contractors (RIL-BP) would be prohibited from installing any permanent infrastructure in support of petroleum operation,” it added.
 
BP said due to the restrictions it will not be able to meet the minimum work commitment it had given at the time of winning the block.
 
The company had committed to do 2D and 3D seismic survey of the entire block.
 
“However, we are willing to consider an option to carry out a similar level of activities if equivalent new acreage is given in a mutually agreed area for exploration,” Bent wrote.
 
Previously, Cairn India had told the oil ministry that a large part of its KG basin block has become operationally infeasible because of new limitations imposed.
 
Cairn on 26th April wrote to the ministry that 35% of its KG-OSN-2009/3 block is “No-Go” area, which runs right through the block, leaving small portions on either side for exploration.
 

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