15 August, 2007: Earlier this month, Stock Holding Corporation of India Ltd (SHCIL), won a major battle by acquiring control over Unitec Value Solutions from SHCIL Services Limited (SSL) by purchasing the shares at par. The new ownership was apparently registered at www.acra.gov.sg sometime in the middle of July.
Although substantial chunks of SSL’s shareholding was alienated by the shady dealings of SHCIL’s former CEO, R.Jayaraman Iyer, an investigation by the Registrar of Companies and an order of the Company Law Board (CLB) under Sec. 250 had allowed SHCIL to acquire control over SSL’s board.
The battle for control over SSL however continues in the form of a petition filed before the CLB came up for hearing earlier this month, but has been adjourned to August 16th. We reliably learn the SHCIL’s attempt, through Mr.R.K.Bansal to buy out the private and foreign shareholders of SSL is not going to be very easy. While one private shareholder – Padma Subramaniam from Hyderabad (the wife of a consultant to SHCIL) had agreed to sell her shares back, two others are apparently planning to sue. They also want to block the Annual General Meeting of SSL that has been ordered by the CLB. The CLB has ordered that Mr.V.S.Rao, the Regional Director of MCA would be an observer at the meeting. Unfortunately, the meeting will need to be held by the seven original constituent shareholders of SHCIL, who included, Mr.R.Chandrasekaran, the founder Managing Director of SHCIL, L.Vishwanathan and R.H.Mewawala (two current Executive Directors who are under a cloud), J.Vishwanathan, a former Deputy Managing Director who is now a private consultant, Ajit Pradhan, a former Vice President who now works at TCS, and Manoj Borkar a legal advisor and Company Secretary at SHCIL who was fully involved in the dubious decisions now being probed. Another original founder Bhaskar Nambiar is no longer alive. Several of the people on this list are unlikely to attend the AGM.
It is worth asking why SHCIL has been promoted in this peculiar fashion with seven employees being made the original constituents in their individual capacity and what action has been taken in the decades of its existence to clarify the situation under Companies Act rules applicable since 1995. The question is, will SFIO and KPMG Forensics ask the right questions? *****