Its about 8K MEDIA. Doesn’t concern 8K MILES !
8K Miles has given an unsecured loan of 100+ crores over the years to 8K Miles Media in a related party transaction. Suresh Venkatachari heads both firm’s!
At least check the address (teynampate ) buddy. Pm strips to 8k miles (all intangibles out of air) to 8k media (RPT) . Life goes full circle.
Isnt the CFO or a similar level person the only authorised person to transfer company money anywhere. What authority does the audit company partner hold to authorise a transfer… Can someone explain please.
maybe there is something im missing, but I dont think company money can be transfered by the audit firm partner, using audit company letterhead, forged or otherwise. It has to be a company authorised person typically the level of a cfo for this type of amount transfer.
Also CHG have resigned in August 2017 itself however the screenshot shows date of April 2018
Can you please share if you have any link on MCA website.
as per my knowledge, every outward remittance by a company should be accompanied by a valid 15 CA / CB certificate provided by an auditor. Auditor ratifies details of remittance. Without this banks won’t process outward remittances. If the allegation is that these forms/ CA ratification are forged, then there is a bigger issue lurking here!
disc- no investments in 8k
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From RBI website:
What is Automatic Route and Approval Route for ODI?
Ans Under the Automatic Route, an Indian Party does not require any prior approval from the Reserve Bank for making overseas direct investments in a JV/WOS abroad. The Indian Party should approach an Authorized Dealer Category – I bank with an application in Form ODI and the prescribed enclosures / documents for effecting the remittances towards such investments. However, in case of investment in the financial services sector, prior approval is required from the regulatory authority concerned, both in India and abroad.
Form ODI is available as an Annex to the Master Direction titled ‘Master Direction on Reporting under Foreign Exchange Management Act’.
Proposals not covered by the conditions under the automatic route require prior approval of the Reserve Bank for which a specific application in Form ODI with the documents prescribed therein is required to be made through the Authorized Dealer Category – I banks
How to forward the proposal for making Overseas Direct Investment (ODI) under approval route?
Ans. The applicant should approach their designated Authorized Dealer (AD) with the proposal which shall be submitted to Reserve Bank after due scrutiny and with the specific recommendations of the designated AD bank along with supporting documents (as mentioned below) to the following address:
The Chief General Manager,
Reserve Bank of India,
Foreign Exchange Department,
Overseas Investment Division,
Amar Building, 5th Floor,
Sir P. M. Road, Fort,
Mumbai 400001.
The designated AD before forwarding the proposal should submit the Form ODI in the on-line OID application under approval route and the transaction number generated by the application should be mentioned in the letter.
In case the proposal is approved, the AD bank should effect the remittance under advice to Reserve Bank so that the UIN is allotted.
For approval by Reserve Bank, following documents need to be submitted along with Section D and Section E of Form ODI - Part I by the designated Authorized Dealer:
a) A letter from the designated AD of the IP in a sealed cover mentioning the following details:
• Transaction number generated by the OID application.
• Brief details of the Indian entity.
• Brief details of the overseas entity.
• Background of the proposal, if any.
• Brief details of the transaction.
• Reason/s for seeking approval mentioning the extant FEMA provisions.
• Observations of the designated AD bank with respect to the following:
• Prima facie viability of the JV/ WOS outside India;
• Contribution to external trade and other benefits which will accrue to India through such investment;
• Financial position and business track record of the IP and the foreign entity;
• Expertise and experience of the IP in the same or related line of activity of the JV/ WOS outside India.
• Recommendations of the designated AD bank.
b) A letter from the IP addressed to the designated AD bank.
c) Board resolution for the proposed transaction/s.
d) Diagrammatic representation of the organisational structure indicating all the subsidiaries of the IP horizontally and vertically with their stake (direct & indirect) and status (whether operating company or SPV).
e) Incorporation certificate and the valuation certificate for the overseas entity (if applicable).
f) Other relevant documents properly numbered, indexed and flagged.
I think Authorized dealer here is bank and all documents submitted to bank needed to be signed by Auditors in both routes. There they committed fraud.
I was quite bullish on this stock, but now it seems it’s promoters are a bunch of fraudsters. Both 8k miles media and 8k miles software have same promoters and 8kmiles have lent 100 Cr to 8k miles media. They failed to send notice to exchanges as well as mentioned by Deloitte in AR. Lets see if they answer all these questions in AGM
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My quick analysis on the 8K miles hot news that is spreading in social media
8K Miles media private limited is not a Subsidiary of 8KMiles Software Services limited. Please refer Page 35 of Annual report for the list of subsidiaries:
- 8K Miles Software Services Inc. USA
(i) Nexage Technologies USA Inc
(ii) Cornerstone Advisors Inc. USA - 8K Miles Software Services FZE. UAE
- 8K Miles Health Cloud Inc. USA
(i) Serj Solutions Inc. USA - Mentor Minds Solutions and Services Inc. USA
- Mentor Minds Solutions and Services § Ltd. India
(Till 28th February 2018)
8K miles Software Services Limited has appointed Deloitte has the auditors for the financial period 1st april 2017 to 31 st march 2022. Refer Ref: 8K/CHN/2017-18/E010 circular in BSE. So GHG associates letter circulated in the social media is not related 8K miles Software Services Limited clearly. So the tweet mentioned by a Prominent fund manager amit m quoting 8K Miles media as subsidiary of 8K Miles shows he is not fully aware of the news.
8K Miles software services Ltd has given a loan/advances to 8K Miles media pvt limited as part of Related Parties Disclosure. This is not news and already available, discussed in public. 8K Miles media is paying close to ~7 crores interest for this loan to 8K Miles software services. This is captured in the Annual report. Many boarders have this question when is the loan going to be recovered ? This is a question to be asked in AGM.
8K Miles software services Ltd reverse mergered with P.M Strips ( listed company in BSE). Basically new promoters suresh/ramani bought the old promoters listed share and renamed it has 8K Miles. This is a public information and also mentioned in forbes article on why this listing method was adopted ? and ceo kind of repented he will not follow this method again because of the complex inticacies involed. So no way the old promoters fraudulent ban by Sebi on 2013/14 was related the new promoters. It is also publically available and not right to connect this with the episode.
All above are captured on paper. But the name and reputation of 8K miles as a brand has already taken heavy hitting beacuse of common name confusion between two entities. I see prominent names in social media are already tweeting and unawarely spreading false news “8K miles auditors forged”, “it is 8K miles subsidiary forged, reason for Auditor resignation etc”. I seriously feel bad why people are biased towards hating some shares, is it beacuse they did not make profit from it. Atleast they have to be informed, check letter dates, subisdiaries, read AR, analyse the company before spreading bad reputation. I already see in twitter some people are commenting certain PR firms are behind malicious campaign against 8kmiles. It is affecting retail investors like us who had already invested and believing this company can turn around. It is a company and 600+ people are employed globally. They should have some responsibility before throwing muck. Please remember the satyam episode a minute and how many employees had to suffer during the period with the investors. I feel personally very bad for them and have lost respect for some prominent people in this episode.
8K Miles software services and 8K miles media have two common promoters- Suresh and ramani, As disclosed in the Annual report. Now some unanswered questions on this episode ?
Why there is no formal complaint or legal procedure taken by GHG associates after 30th april 2018 on 8K miles media ? I am not able to find anything related to this on google.
Is the ODI amount of 46 crores is already settled to Indian bank by the promoters on behalf of 8K miles media ? is that why banks has not raised any issues on default ?
Is the Auditor blaming or revenge act beacuse they had been replaced by Deloitte ? sounds very dramatic. But forging is still sensitive and ethical matter to be addressed.
Though it is a completely different entities and not related, still the promoters have to commmunicate at earliest because they are common and it has affected the whole brand. It is spreading unnecessary confusion in already beaten stock.
I suggest the boarders to add questions related to this episode as well in the AGM.
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It is not a subsidiary of 8K miles. It is a company which shares the same key managerial personnel and they have inter-company transactions … but it’s not a subsidiary of 8K miles… read the annual report … it’s written in simple English and won’t be very difficult for you to understand… I guess we both now know who is educated and who is not !
List of Subsidiaries in the below screenshot
Company has already mentioned in the annual report for 2018 about the loans provided to 8k miles media and they have also paid back an interest
The letter from GHG associates mentions date as 30th April 2018 where Deloitte was appointed as auditor much before .Screenshot from june 2017 quarterly result
The" inability due to other professional commitments" in the screenshot feels gawky, there might be some bad blood between promoters and auditors. Hence may be the appointment of Deloitte
In overall ,my view on the company remains the same.A very good software company , focussed on growth ,which seems to forget about the retail shareholders(company does not give out dividends and does not bother to give out proper clarifications ) and has not maintained proper accounting standards in the past.Hence the appointment of Deloitte was a important milestone in my opinion
The same has been discussed multiple times in this forum and I have learnt a lot from this company
Disc :Invested 10 percent of my portfolio in the range of 590 . In hindsight I would have liked to stay away from the company, but I was a very newbie investor when I bought this script. My bad ,I just observed various numbers and ratios and did not analyze the details .The market is right in punishing me I believe
Holding it ,because the auditors are Deloitte and since it is highly ranked by Amazon and Microsoft for its cloud services
It will be great if you can elaborate on above or just point to source. Thanks
I am not sure why some people are defending 8k miles when a lot of concerns have been raised about it time to time. There is no smoke without fire. Price action of 8k miles is suggesting the same.
No stock loses 75% of it value in a sector where most of the companies are making new highs unless it’s a fraud.
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There is a lot of smoke but no sign of big fire. It is evident that there may be some corporate governance issues (Infy has corporate governance issues) but not sure if the beating the stock is taking is commensurate to these issues.
Just measuring in terms of revenues, cornerstone alone has an estimated revenue of ~15M and Nexage ~ 10M
https://www.owler.com/company/cornerstone-advisors
https://www.owler.com/company/nexageusa
http://www.hoovers.com/company-information/cs/company-profile.nexage_technologies_usa_inc.e3f147a0931be1b8.html
This seems to be heavily over sold territory.
Disc. Invested
Amit got the attached letter from MCA filings on 8K Miles Media Pvt Ltd, which is on the auditor’s letterhead. 8k Miles - Resignation Letter.pdf (258.4 KB)
I called up Mr Haresh (on the number in the letterhead) to verify. He picked up the phone and identified himself but disconnected the call when I broached the topic.
GHG Associates and its auditors will be more worried about its reputation (being small and relying on their word-of-mouth than a big-4 than can rely on its brand) and most likely will also have complained to RBI. Since the letter is dated April 30, there is some chance that they got to know of the alleged forgery in the course of their statutory audit of 8K Miles Media Pvt Ltd.
To say that the company involved is not the listed entity, but only have shared common promoters (allegedly forging) who control both firms, hence we are possibly safe, is quite self-delusional.
Based on trading volumes, deliveries, coupled with timing of corporate announcements, and movement to 100% delivery, I suspect that the large non-institutional shareholders have offloaded their shares (I think more than 10% of total outstanding shares) between 01 July and 26 August (~ when it became 100% delivery) and the counter parties have largely been genuine investors. The two institutional shareholders have a small %age of their AUM and they would rather mark to market than sell it down, for NAV purposes.
Thus, the new guys left with the shares are for the most part, genuine investors, and a heavily increased number since June 30, who may not be aware of the drastic impact of reduced market making with 100% delivery. After a spate of bad news, ‘prisoner’s dilemma’ would have set in (thanks to @phreakv6 for seeding this in my head) and there is a rush to exit before ‘anyone else does’. Now as more people think and act on the same, it pulls down the price creating more number of people wishing to exit, in a downward spiral and creating a one sided trade.
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Well said.
I have been following this thread from a long time and this is my first post. Its sad the way some investors have been personally feeling offended if some negatives are highlighted. We should not be in love with our stocks and should take a rational view. When someone i knew introduced this company to me few years back, first thing i did was a cursory google search on the founder and it was enough not to touch his company seeing his past. Of course i missed the manufactured bull run on this counter but have no regrets. Its the process which counts and not the outcome.
When the Facts Change, I Change My Mind. What Do You Do, Sir?
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Can you name the photo forensic tool you used?
Thanks. This seems technical for non-experienced. I do not know if it would right to ask you to explain with evidence you findings of analysis of resignation letter.
@diffsoft Callup the auditor but he did not deny the resignation, instead disconnected the call. I believe he would have denied, if he would not written it.
Clarification issued by 8K Miles
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Best clarification would be to give regular high dividends. They are in business which needs no capex.
Something is missing here. Reminds me of things like Geodesic.
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Not sure what purpose this really serves as the document is from the MCA filing and can be independently verified at source.