8k Miles Software Ltd, Cloud Computing

(phreak) #833

When the game is up, lot of pretending does go on. Does Suresh Venkatachari resigning as CEO of 8K Miles Media change anything? He was the CEO after all when the fraud happened (Still is listed as CEO on their website). Is it possible the CEO did not know his auditor resigned? Its a bit hard to believe.

I have seen this in the past in Fiberweb where the CEO pretended he did not know a company he himself founded. I won’t be surprised if Suresh Venkatachari’s picture disappears from the 8k miles media website and he claims to have no links to 8K Miles Media. But the truth is that there is way too much linkage. The MCA website lists Ramani’s 8kmiles.com address as the official email address and this Ramani was the CFO of 8k Miles.

So if the CFO has gone rogue and that’s why he is selling shares of the listed entity, then why will he lend that money back to the company? That should at least mean that Ramani and Chari are in good terms? And that should mean that everyone’s in it together? The auditor alleging fraud is in good detail of the dates, number of transactions, branch, amount, where the money went etc.

If these businesses don’t have good standalone business based out of India - Where is all this money that is being transferred abroad come from? As always - follow the money and the whole thing will unravel. I surmise that the money came from selling 8k miles shares! This is similar to what happened in Lasa. The two promoters claimed they were raising cash to pay off debt and that’s why they were selling equity while poor retail bought the story and held on while the promoters dumped at hefty valuations. Where did all that money come from to pay debt? From the shareholders of course. That’s the main source of income for 8k miles here isn’t it? Now does it make sense why money is being loaned back and why money is being siphoned off without the auditor’s notice abroad? Also notice the dates of the alleged fraud transactions - they are in the same dates either after or during the time Ramani was selling shares. If this was for legit reasons of funding acquisitions, they could have done this above board and needn’t have forged anything? There’s just way too much smoke here for there to be no fire.

Today a 100 Cr, say less than the 120 Cr amount Ramani made by selling part of his stake would almost fetch 16% of the company - that would take the promoter’s stake to 75%. Am certain when their own company is available for filthy cheap valuations, they wouldn’t be running to buy some random company abroad? I wouldn’t, if I thought my company was valuable.

(Altruist) #834

These are not mere allegations - they are addressed directly to the co. and offered as the primary reason for resignation. 5 months is a long time - more than enough for a company of this size to conduct an investigation, ascertain the situation and communicate findings / take action. The clarification published yesterday only says looking into the points raised (after 5 months).
People need to decide if the chronology of events / actions gives them comfort with the management. If it does, more power to them.

(Gaurav Agarwal) #835

Are promoters not free to sell the shares of company they found? Is it some kind of crime. Didn’t Sachin Bansal sold his stake in Flipkart? Do you thing Flipkart has stopped growing!! What about share sale of PVR by Ajay Bijli and I should also mention Siddhart lal of Eicher!

I believe after founding a company, all promoter at some point wish to sell a part of their holding and do something else with that money. I feel it is quite normal.

You will notice Suresh still hold more than 50% of company.

I believe you are right. The money they have send to 8K Miles Media, USA is their personal money. If so I have no problem and promoters are free to fund any company they wish to.

Only question remains is -

  1. Is revenue real?
  2. Why auditor wrote that resignation letter? Is it vengeance or what did 8K Miles Media, India do wrong?

8K Miles Media, India is a private company. Whom do you wish them to communicate findings of investigation?

(Altruist) #836

By your own logic, there was no reason to include the note that the pvt. co. was looking into the points raised by the auditor? That was in fact unrelated to the clarification whose purpose was to delink the director from the pvt. co. Since they chose to speak about the auditor’s points, they might as well have offered an indication as to which way things were headed (example - remedial measures have been taken, pursuing legal options…).

It is really easy - if you feel there is no real need to comment on an issue, don’t. If you feel it merits a clarification, communicate clearly.

(Nasirul Amin) #837

Ye market hai ye sab jaanti hai. Market knows everything. Isn’t it the reason price was crashing from a long time actually around May onwards? I found the letter only now but seems people knew it from long time and that’s why they were selling at any price.

Yes, many didn’t know probably as u can buying has dried while selling volume has increased.

(bharat19) #838

I completely agree with your point. Personally i feel that most of these Tech companies are created only for the purpose of Faking the Numbers and looting the Share Holders Money. Almost 50% of these Scams occur in Tech Companies. We should start some thread on this where we can analyse where not to invest based on our findings.I have come across one Company “Kellton Tech” which again looks like another Scam in making.

(RJ) #839

Its good to see people debating and asking some very good questions regarding various issues/unknowns. There are a lot of unanswered queries around what auditors and prompters did or didn’t do. I don’t think anyone on this forum has a verifiable/fact-based answer. So these queries must be raised in the AGM.

I wish to know from the experts: Lets us assume the fraud did happen and the auditor reported it.

  1. What is the exact procedure that is followed by the auditor?
  2. Does the auditor only sends an registered post and it is free from all responsibilities?
  3. Who uploads these documents to MCA website or how does the resignation letter reach MCA?
  4. Is the company liable to reply within any specific time to MCA or some authorities?
  5. Being a pvt unlisted company, when sending money from an indian entity to US entity, is an auditor approval required?

(Nasirul Amin) #840

This is from their Annual Report. They make huge amount of money yet they are trying to raise funds as per Agenda of AGM.

(phreak) #841

@Nasirul - The last one with 16.5 lakh shares transferred to another depository account is interesting. This is not part of the disclosures on BSE. If it is not part of Promoter category, then it certainly doesn’t reflect in the percentages. Only shares sold and disclosed by Ramani and Bhaskar add up to the reduction in promoter holding of about 6% in the last year or so. So the disclosed Promoter holding is probably less than actual? This could be another 130 Cr or so worth of stake which was sold if that’s the case. If the benefit of late disclosure + fine + an apology of “inadvertence” is greater than profits made by selling at higher valuation, then I will not give the Promoters the benefit of doubt here.


Just wondering why do we keep analyzing companies which have fraud written all over them?

(Nasirul Amin) #843

To know in future the templates used for fraud. To safeguard ourselves & protect our valuable capital.

(phreak) #844

As someone who loved working back from the solution in science and math, be it in lab experiments or in proving theorems and later on in reverse engineering, there is a natural love for me in understanding what makes certain things work and more importantly what are the things that don’t work. This is important vicarious learning and we cannot let go of these precious opportunities because they enhance thinking and refine our mental models when we look to analyse other companies in the future. It increases the skepticism quotient. If anything, we should be doing more of these so that our ability to invert comes as naturally as our ability to see causation.

(MHS) #845

(PavanM) #846

This forums motto should help in answering this question; to learn ‘Separating Wheat from Chaff’.

(Silmaril) #847

This I believe is Sandeep Tandons 6% holding which was missing from the march shareholding pattern, but can be seen again in the June shareholding pattern. The quantity and percentage are matching.

(Gaurav Agarwal) #851

Can you expand on that? In March Sandeep Tandon is showing 2.4% again in June he is holding 6.4%.

I could not get your point.

(Krishnaraj) #853

My observation too, but I think mods curate before offering a user-id.

There is a high likelihood this thread is monitored by 8K Miles as a way to pre-empt / prepare what may come in the AGM.

(Silmaril) #854

They can preempt and prepare all they want. But they can’t escape legal proceedings if this allegation proves complicity of Suresh, Ramani or 8k miles software in anyway… There is no justification or explanation for proven fraud.

(RJ) #855

Since no one replied to my queries, I assume we do not have any expert on this in this forum. So I tried doing some google search and found this: https://taxguru.in/company-law/reporting-fraud-auditors-companies-act-2013.html

  • Fraud, which involves or is expected to involve individually an amount of Rs. 1 Crore or above – To be reported to Central Government
  • Auditor shall forward his report to the Board or the Audit Committee, as the case may be, immediately but not later than 2 days of his knowledge of the fraud, seeking their reply or observations within 45 days.

More rules/actions from auditor in the link above.

Since its more than 45 days since the fraud was reported, I assume there must be a detailed report on the fraud with MCA from the auditor. Can someone please access it to bring clarification on all our doubts/queries.

(Deven Kulkarni) #856

Assuming the auditor has reported the fraud, the should have been transferred to the SFIO for investigation. Had the SFIO taken any action it would have come out in media by now