Why such things happens to such companies only. Did not few monthly back some broker sold kwality promoter shares . Market is intelligent enough.
I agree but market had not priced this in ! The free fall was due to various other reasons ! This is something completely new for which the market reaction to stock price is yet to be seen.
Two ( note two not one)broking firms sell.What quantity they sold.Not known.Was it after June30 when shareholding Pattern was disclosed.?
25 lac shares transferred and Adroit the share transfer agent did not know till September middle that SVs shares were coming for transfer.Unbelievable.
GHS associates, the auditor accuses CFO of forgery.
The auditor Deloitte mentions of “inadvertent” errors in account classification .
The CEO accuses two sharebrokers of illegal transfer of his shares.
The co declared Rs7 dividend and revises it to Rs1 and CFO sells his shares in the interim period.The company pleads ignorance of laws.
The company couldn’t finalise its accounts on time as it did not anticipate time required for complying with new laws.
Too much of coincidence?Will they use this alibi for the fall in share price and delay in results?
Police complaint on Sept 12 and disclosure one month later… ofcourse they will issue another disclosure that it was a typo in the earlier letter and they meant Oct 12 ️
After coming across this forum an year back, I have been an avid reader of all the discussions going on in all the threads. The postings of senior members like Hiteshji, Capsule 91, Phreak and all the others have been extremely useful to me to wade through the landmines of the stock market. The help which accrued to me was not spotting of multibaggers, but the knowledge to avoid or dump stocks having corporate governance or poor management perception issues. I greatly acknowledge my deep indebtedness to all forum members for your invaluable service. Perception about the management of 8k miles has taken a huge beating. I don’t know the nitty-gritty of their finances. But one thing is for sure. Companies whose managements take their share holders on a ride are not given the right valuation even in the next bull market. Reliance capital is an example. Likewise in this stock too, there have been warnings by senior members of corporate governance issues involving this management. Those who bailed out at the first inkling of this knowledge stood to gain, but those who exhibited false bravado has suffered the pain. It looks pretty doubtful that even if everything turns out well, this stock will retain its past glory. l once again express my deep gratitude to all senior members who takes their valuable time to guide novices like me in remote district of Kerala like Idukki.
Feeling sad for promoters, somebody ran away with their money.
A very good company, doing could what all traditional indian companies missed has to see this day.
I hope now promoters bounce back. Future is still very bright in cloud computing as many other pointed out in this thread.
Let’s hope for the best.
a simple common sense triangulation that I had used and warned people here. it needed only a preliminary check on linkedin to see how many people work in all the companies working in 8k miles and triangulate it to a productivity metric and see how it compares with the rest of the industry. The answer would be self-evident. This is something I use along with statutory dues like EPF, professional tax to triangulate the number of employees and if the claimed productivity makes sense.
i leave it to the discerning to figure out what it translates to and the results and understand the probabilities of such numbers in real life.
Whenever you have a doubt about the number of the company, triangulate it with other metrices - productivity, statutory payments, EPF, tax paid etc. and lots of times the answers stare in your face.
You wrote a similar peice on Take solutions a few months back on that board.I referred that to the CFO and she said this is not a conclusive method of comparing the labour cost with productivity,matrixing with statutory dues like ESI/ PF etc because when a substantial work is out sourced or got done by temps these do not work and she told me your note there only cast doubt but nothing beyond it.In fact each of the questions that you raised there she answered satisfactorily with figures.There is an analyst meet on 31Oct in Mumbai and you will get the answers to all the questions on Take solutions.I do not know if there is an analyst call and if it is there you can raise it.
Everyweek the RTA sends to the company a weekly list of shares sold and bought by various members.Did the company not see it?Even otherwise the RTA would have alerted that shares of SV are being sold.It is beyond my comprehension as to how such a big transfer went unnoticed for weeks.Even otherwise the company should have informed SEs on the day they came to know of it and also shared this with members in the AGMThere is something deeply disturbing with the conduct and now apart from a police case, SEBI is bound to step in to contain the damage and protect shareholders.
Is this a prelude to something more shocking?.
I wanted to comment on the credibility of the disclosure that the promoter’s child-like innocence led to shares that were “wrongfully and illegally transferred through Off Market transactions on various dates to various parties without his knowledge/consent.” The letter states these shares numbering 25,70,000 were held in various demat accounts with two brokers, acting as DPs, who committed this act.
If these shares were transferred they have to be done by filling in the prescribed delivery instruction slips that have to be signed by the owner of the shares, in this case Mr SV, on both, the client copy and Depository Participant copy, much like signing a cheque with the name of the shares, quantity, ISIN number of the scrip, name / DP and Client Id of the transferee & date of execution.
If he signed them how can he not know what he was signing on? Maybe, you could argue, he handed over a signed but blank DP slip to the two brokers. Which means he gave them something like a signed blank cheque. The only other option is that his signatures were forged?
Now, if he signed a blank DP slip then he cannot say it was done without his knowledge and consent!
If his signatures were forged he would mention that upfront as charges, as any genuinely aggrieved party would, but instead he says “wrongful” and “illegal”. I mean if someone uses my cheque book and forges my signature to take my money out, I am not going to say someone did something “wrongful” and “illegal”. I am just going to say that someone “forged”, just like GHG Associates’ auditor did. There is no mention of forgery in the disclosure. Instead some weak and untenable charges like wrongful!
Most likely he gave blank signed DP slips to his brokers. Why? I will come to my hunch later.
These shares were transferred “… without his knowledge/consent.”
Anyone who has transferred shares via such slips would get (a) a phone call from the back office of the broker (probably recorded) to the owner seeking confirmation before the transfer (b) an SMS message from NSDL / CDSL stating that xxxx shares have been debited from his demat account, soon after market hours ( c ) a demat transaction statement from the broker within 24 hours of the transfer and (d) a statement, end of the month from CDSL / NSDL. He would have thus either, given confirmation of the transfer over the phone, or got an SMS / email at the registered mobile number / email address. Anyone in the market knows we have extremely foolproof and robust systems that cannot offer refuge to such excuses.
It is thus highly improbable that he was not aware of these transfers or done without his knowledge.
These transfers were done on “…on various dates…”
If these were done without his knowledge/consent, then he had an opportunity to stop it on the first date itself, but no, they continued for many days. These transfers were done on “various dates” and thus there would have been a barrage of statements / mails / phone calls on or around all these dates! He thus had multiple opportunities to stop such transactions that were according to him “wrongful / illegal” but they weren’t stopped.
This further strengthens the case that his claim (of transfer of 8.42% of outstanding shares were done without his knowledge / consent) has little credibility.
The statement says “…to various parties…”
If they were done without his knowledge / consent, how did he know how many parties they were transferred to? The best he could say is that “they were transferred out of my account”. But he says they were transferred…to “various parties”. How did he know that there was more than one party for such transfer? The book Spy the Lie talks about the “truth in the lie” as an indicator of deceptive behaviour, and there seems one here!
The statement says, "…transferred through Off Market transactions… "
If they were done without his knowledge / consent, how did he know that they were Off Market transactions and not market transactions? He can at best know that there were transfers of some shares out of his demat account. Again there seems to be a betrayal of the “truth in the lie”
Further doing an Off Market transaction is tax inefficient at first glance. Why would anyone buy non STT paid shares via an Off Market transaction knowing he cannot get the benefit of lower taxes in capital gains? Which means the buyer / beneficiary of these shares is not treating these shares for capital gains. Most likely as a settlement item on his Balance Sheet (for eg recovery of loan via appropriating collateral).
The Company knew of the share sale as early as 01 October 2018 but kept mum till 12 October. It knew on 01 October because SV filed a report of pledge to the company, which discloses the total shares he holds - 1,44,59,533, less by 25,70,000 from end of June. Thus the Compliance Officer (funnily enough he also signed the pledge report) knew on October 1 of this sale but did not report it till October 12, a clear violation of Insider Trading regulations which require reporting within 2 trading days by the Promoter/Compliance Officer.
My hunch is that these shares were in effect offered as collateral for loans availed by way of signing and giving blank DP slips to the lender, which were subsequently invoked by the lender upon certain breach (most likely price). These loans are in substance share pledges, though not in form, giving the added benefit of avoiding any declaration to the banks (Indian Bank and IFCI) / exchanges.
Anyone in this thread ,investor or part of DSP Mutual Fund?..Want to know the conviction behind DSP Mutual Fund if they are still holding it… Attached latest factsheet ,but I could not find 8k miles in the factsheet…Can some one please check factsheet again dspim-factsheet_august2018.pdf (1.6 MB)
They still do, but now divided under two schemes:
- DSP equity opportunities fund on page 9
- DSP Small cap fund on page 13
Earlier the entire holding was with DSP Micro cap fund, which is now renamed as DSP Small cap fund (page 13).
Makes so much sense ! I am certain that he must’ve taken a loan from Quantum ,on which either he failed to repay multiple interest and/or principal … Or failed to M2M the loan pledge of shares due to falling stock price ! After which the lender (quantum) is left with no choice but to offload !
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.
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.
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. 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.
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?