Securekloud Technologies Ltd (was 8k Miles Software Ltd), Cloud Computing

#diffsoft
1)SV apparently has taken a unsecured loan from these outfits and kept the shares with the DPs and given the signed blank DI book.Generally they get a loan of about 50% of the value of shares with an informal agreement that if the value falls by 40% of the value on the day of disbursal the shares can be disposed by the lender.
2) He did not pledge the shares as a pledge will have to be disclosed.
3)On a fall, the lender has sold the shares and SV has no excuse other than blaming the brokers for selling without his consent as otherwise he will be punished for non disclosure.
4)This letter is by the company on its letter head quoting the CEO.They have to reproduce his allegations whereas it would have been more prudent if they had simply uploaded the letter without any comments.The company has reproduced his allegations in Sno.1 and 2.The company cannot comment on the veracity of the allegations which will be done by SEBI/police.
5)Sno3,4, 5 are correct as far as SV is concerned.He will say there was no agreement under which they could sell and that he left the DI book in good trust.When he saw the DP statement he found that the shares were transferred to various parties on various dates as off market.This means the brokers did not transfer the shares to themselves first but they transferred it to various parties directly.These parties may be lenders and the broker acting as a middle man.The lenders could be having some blank orders to sell signed by the borrower.The DP statement will show the dates on which they got transferred, the quantity and the counter party DP ID as it is off market.This was all done as a postmortem.
6) The question that begs an answer is what was he doing to the alerts of transfer on various dates. He will say that he was travelling and his India mobile was in the office and nobody could attend and hence he knew only when he saw his DP statement.
7) Your Sno.7 and hunch are correct and this is how promoters try to browbeat and delay prosecution by SEBI.
We need to see the copy of the letter by SV to company and the copy of FIR to know what happened and when it happened to make more comprehensible conclusions.

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Great analysis. Even as above is being speculated, there is an unquestionable market behavior on Friday…when ~9 lacs shares (may be even highest in a long time) were traded…that too when this scrip is T2T category. There were for sure volumes of retail investors’ to the extent of 10%-15% on the margin…but at the core there were definitely big sellers and buyers. Who were they? What trigerred this flurry of trade from first minutes of opening of NSE bell to the end? This abnormally high volume is a FACT…not at all an speculation. Any thoughts on this? And of course after initial 2 lacs+ trade on NSE today, it got locked on LC…

Will appreciate forum members’ comments. Thanks…

@PrasadJ - Retail loves price/volume action and the operators know it well. I think the large volumes you see are just circular trading. But the sentiment on this scrip is at such lows that pretty much no tactic is working. It has worked in the past though (last year Sept/Oct and Feb this year and also July) where sharp bounces brought activity to this board and sentiment turned on a dime. Now a lot more working capital will be required to turn the sentiment and I don’t think anyone is going to risk that here.

The extensive dissection on this board of various issues has put a spanner in the works of the distribution. While it is delusional to think posts on these boards influence price/action on most scrips, in small/microcaps they very much do. Having observed quite a few of this sort of manipulated price/action, I think this is just circular trading, so its better to not draw any conclusions from that.

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It doesn’t explain all of motivations underlying this high volume. Why on the day after this letter came out? There were miniscule volumes in prior days. And this volume in T2T? Isn’t circular trading or round tripping (if proven) punishable by law? There appears more to it than meets the eye…

Am afraid there might be less. :slight_smile: All decisions should be evaluated in terms of probabilities and payoffs. If circular trading is punishable, the probability of getting caught (and proven) and punished with a possible 2-5 lakh fine should be evaluated against the probability of profit, or in this case, lesser losses/slightly better profits and the certainty of it. To beat a crook or to avoid being beaten by one, one must think like a crook.

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This seems to confirm the speculation that the shares may have been offered as “collateral” for private financing from the brokers.

The choice of words is interesting, ostensibly passing the buck to the ex-CFO. Some documentation would likely have been prepared in relation to the financing - would be interesting to see what it contains. If there was none, that itself prompts the question - why choose such an option?

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alright. do you know who do they outsource to ? they themselves do offshoring and outsourcing and its seems strange that they would outsource. Who are the companies they outsource to ? what % si outsourced and how are such partners selected ?

can you pls throw some light ?

Assuming the two brokerages were out of line and sold such significant volumes in the price range of 695 Rs (closing 2 April 18 price) and 490 Rs (29 June 18 closing price]…at simple average price of 592 Rs, it will be a sales value of ~Rs 150 crores. SV is claiming this amount per this business standard reporting. (I downloaded the Q1 activity report from NSE website).

One related question is…did SV get the short term funds for which he placed these 25.7 lacs shares?

If the charges are proven correct, is there a provision in law that allows other investors to get reimbursed for the collateral damage they have suffered by these actions of the two brokerages? Is there a provision to file a ‘class action’ case (like they do in USA) against the two Brokerages?

Surprisingly, it is now over 3 days and the two brokerages haven’t made any statement!

Nice. Perhaps they should say again instead of now. They were Premier partners back in 2013 and likely slid in status the following year.

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You mean Business Standard newspaper? Can you forward the link.What is this Q1 activity report?

Sorry.I got the link.Now this is all stage managed.Ramani was dealing,Quantum doesn’t have NBFC licence,Get money without getting s pledge…So SV is trying to absolve himself.If Quantum is not a NBFC ,on what basis he borrowed?
I was calculating his total investment till date is about Rs50 crs and he has made 3 x in 8 years.This will take years to resolve.I am now anticipating something more drastic .They may delink US subsidiary from the Indian unit.Will elaborate later on.But the ground work seems to have started .
There is no provision for class action suit at the moment.The brokerages did what they had to ,to protect their interest.I do not think they forged the papers.The lenders take all precautions before disbursing.

#varadharajan
The outsourcing is in the form of temps and consultants.This would change from time to time.Payments to some consultants would be as consultation fees, to some as remuneration/ salary.
Some payments will get capitalised if a new product is developed, some may get charged to R&D,while some may appear under product development.These will change from time to time.
I wouldn’t know nor will any company tell you the basis of selecting these people nor will there be any one organisation who will be supplying these people.
Last year they told me the payments to these people was about 5-7% of total cost.
For more details you can attend their analyst meet,

SV is slient on total sum of money he borrowed from these two brokerage firms and why…this is becoming a huge scam…

If several share holders make a complaint to sebi and seek investigation, sebi has the powers to compensate investors by penaising the erring promoters

Maybe he knew the company was worthless? (Applying Occam’s Razor here)

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Suresh Venkatachari on CNBC TV18 says the brokerages sold the shares in March/April this year and he got to know about it but was collecting proof! So the 25 lakh shares were sold at peak valuations and probably gave a 200 Cr profit which means SV has done well for himself just as Ramani did. So many questions come up. If he knew about it long back, then why didn’t the June SHP reflect it? Why did it have the wait until after the AGM? These are not corp gov “lapses” as he says but intentional crimes committed against the shareholders.

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This article makes some pertinent points. It is clear that this route is far from desirable and could be seriously detrimental to retail investors.

The main question here is - why should a company that is seemingly doing great business go down this path?

I too heard his interview.As I guessed it right he sold along with CFO though the blame is on the brokers. CNBC did NOT ask him if he borrowed money and if so how much and for what purpose?This was crucial.
He did not answer Anuj’s question on how could they transfer without a POA or DI.He said they forged his signature.Forged on what?On a DI slip.?You cannot forge on a plain paper and transfer shares.
He also obfuscated by saying 8K miles India did not give a loan to 8K media.When persisted he said 8K inc.US gave a loan to 8K media.On resignation of GHG associates as auditor he attributed it to professional discomfort

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May a link to this CNBC interview be shared, if available/possible? Thanks…