The Bombay High Court, earlier this month, ordered the resumption of proceedings against Helios and Matheson in a case relating to the fraudulent acquisition of vMoksha

Moneylife Digital Team

Helios and Matheson (H&M), the Chennai-based company that is involved in a battle with vMoksha Technologies over the fraudulent acquisition of its subsidiaries, appears to have failed to inform the stock exchanges of a recent Bombay High Court order restarting proceedings against H&M and its chairman.

Moneylife has learned that till date H&M has not informed either the Bombay Stock Exchange (BSE) or the National Stock Exchange (NSE), about the High Court order on 6 May 2011, setting aside the Sessions Court order and allowing a revision application by vMoksha's founder Rajiv Sawhney against H&M.

High Court judge JH Bhatia also ordered all the involved parties to appear before the Additional Chief Metropolitan Magistrate on 4 July 2011. (Read, 'Bombay HC allows proceedings against Helios & Matheson')

Mr Sawhney has written a letter to the NSE alleging H&M's involvement in conspiracy, cheating, fraud and forgery against vMoksha. He has also mentioned that H&M has not updated the stock exchanges about the court order against the company and he has appealed to the exchange to de-list the company and bar its directors from raising funds.

The case dates back to 2005, when shareholders of vMoksha, an IT company, decided to sell its three units. The company appointed PriceWaterhouseCooper, who found out H&M as potential buyer for vMoksha's three units. On 11 May 2005, both the companies signed a share purchase agreement under which V Ramachandran, chairman of H&M, was to pay $19 million for the three units. Of this, $4 million was to be paid as the earn-out to Pawan Kumar, the then chief executive of vMoksha and former CEO of the controversial DSQ Software. Although, Pawan Kumar and his family members were also stakeholders in vMoksha, Mr Sawhney later bought out their stake as well.

Mr Kumar was allegedly hand in glove with H&M. Mr Sawhney soon realised that he had been kept in the dark about many aspects of the deal.

For instance, he found that instead of receiving $19 million, a bank account had been 'fraudulently' opened in the State Bank of Mauritius in vMoksha's name and used to borrow $13.5 million, using a fake board sanction and false entries. That money was remitted to H&M ostensibly for subscription of redeemable preference shares on 28 June 2005.

Moneylife has previously reported about the bruising battle between H&M and Rajeev Sawhney. (Read, 'Helios & Matheson Under The Scanner')  Moneylife has also reported on how the market regulator, the Securities and Exchange Board of India (SEBI), had fined H&M Rs50 lakh for making false announcements to influence the stock price and hiding information about acquisition of vMoksha. (Read, 'Helios & Matheson fined Rs50 lakh by SEBI for financial irregularities; vMoksha co-founder also penalised') 

A detailed e-mail query was sent to H&M, the NSE as well to the BSE for their comments. The message was not answered till the time of publishing the story.