It is my hunch that their plot has gone awry. One / some of their members on the trading / market side has probably backed out and / or left holding with shares to dump.
I say this because the mistakes made by SV in covering up are so silly that it seems his script writer is gone and he is alone. At the same time the fact that he has to come on CNBC shows some compulsion to provide some explanation to those member/s.
For eg if he says they were sold in March / April, the shareholding pattern at March end and June end does not reflect that although the Secretarial Auditor did comment about the shortfall in the Promoter shares (page 37 of the Annual Report extracted a few minutes ago)
She says as per DI slip he transferred (before March 31, 2018) 16,50,000 shares to his own account maintained by another DP, but these are not reflected in the promoter category or in public as on 06 April 2018 (benpos means beneficiary position = beneficiary holder). The SHP filed with the exchanges however shows it to be in his name as on March end, which was a holiday and the previous Friday March30, the closest day for benpos list was also a holiday.
Obviously these things did not cross his mind to cover up when he was speaking to CNBC, as well as the process of share sale, which anyone could have briefed (certainly Adfactors if he had hired them as he claimed!). In any case we do not know who lent him the money against these shares that he claims were illegally sold, and we cannot assume it to be Quantum / Kumar. These DPs may have just been given the filled in slips to transfer shares to the party mentioned in the slip (from whom loan would actually have been taken) and they would have done that with due process. Just like the teller in the bank - can’t hold her responsible for siphoning the funds if she clears your valid cheque . Another point is that the press release yesterday said “Ramani informed me that he has received a proposal wherein I can get some funds for a short duration for private investments in other business ventures without even creating a pledge on my shares and hence he was dealing with these brokers through an intermediary for arranging this private financing,” betraying the fact that he indirectly pledged his shares in quite a clumsy manner.
In any case, there is lots to learn form this unfolding saga, especially how to figure out how Promoters and Traders collude!
Saw the two interviews SV gave on CNBC and BTVI. Our anchors are truly appalling in their questions. No drill down to specifics, no questions on a supposed healthcare acquisition he had talked about 2 months back, nothing on Q2 result declaration dates, future outlook, no blunt questions on if there are more skeletons hidden in his/8KMS cupboards (at least questions need put) etc. An opportunity to gain clarity on 8KMS past, present and future from CEO is lost. However much one may like or dislike or critique him, he is the one in charge…and is the most authoritative gateway to company information/perspective…
Absolutely…working backward, it is quite likely that these channels were reached out to, and prepped for some specific questions and nothing more. In fact CNBC went on to say that “8K Miles Software hits lower circuit, recovers after CEO clears the air” (which it did briefly but came promptly back to lc and that was not put up) which indicates that they were tasked to give a certain impression. Some 100,000 odd shares changed hand soon there after.
Adfactor showing its clout.The reasons for Auditor resigning,the documentation used by brokers for selling his shares,whether the shares were pledged/ assigned for borrowings,the charge of forgery by auditor of 8kmedia were all far from convincing.
Surely he will have to compensate for losses incurred by shareholders as he sold 8%shares without notice.
What a drama unfolding here!! It takes years to build your reputation and only few minutes to ruin that entire good will!! As an outsider watching this story from sidelines, I am truly not convinced with the promoter playing a victim card (we acted like a startup and trying to rectify that!!) Even, if there is a grain of truth in this entire saga, only more misdemeanors are coming out the next day!! And, now the company is targeting NASDAQ listing!!! From Cloud computing to block chain to…NASDAQ listing and next in line- may be Mars Mission? A lesson to remember for a lifetime!!
disc: no investments in the stock. Not a buy sell/reco. Pls do your own due diligence.
A genuinely minority shareholder friendly interviewer / journalist could have gotten to call up the two brokers alleged, tell them this is an opportunity to get their views public to clear the air, and made them face SV. If they refused to come on air, these interviewers could have gotten some simple questions answered like:
Have they been approached by the police / SEBI? Yes / No
Are they aware of the allegations of forgery / cheating / criminal breach etc made? Yes / No
What is the nature of their relationship with SV? Open ended
When were the transfers made and who were the counter parties? (the brokers may say it’s confidential but worth a try) Open ended
In any case I think at least Latha asked one question that added more knowledge - “have the regulators contacted them (SV)?” To which the answer was a rapid no, which, for someone who noticed an overnight loss of 100s of crores of his wealth in July and says has been pursuing it since, should be revealing in itself!
Incompetence at its best across all levels.
To that question from Latha, I thought he said he had voluntarily given all the papers,without saying yes or no to the question.Can you confirm if he said ‘No’.
If you watch CNBC to take invesement decisions then good luck… Its just entertaintment… Did anyone blame them when they got this guy to pump the stock up by giving interviews during the good times…No because everyone was making money then.
I listened to the interview and was not convinced about the replies at all. I saw some posts above asking why someone in SV’s position would do such a thing for only 8% of the company. The answer is quite obvious in my view. The company was never worth the multiples it was garnering in the stock market. Being a purely professional services company, they were claiming to be much more, positioning themselves very overtly as a product company. Moreover, my personal opinion based on conversations is that the revenue itself was inflated. It appears that they have a couple of strong accounts like Novartis and Trimble but the revenue from these accounts is less than $10M each.
this is how people become bearish when the stock is falling…suddenly everything becomes negative.Almost everyone is forgetting that he paid 60 crore taxes .He also mentioned about paying back one of the loans and getting his shares depledged from one of the banks in next 2-3 months.That can be a huge positive in the near future.And he has promised to get his money back from media company…Once these two transactions happen,I m sure the stock will be rerated…
The 60 crore tax figure is as unreliable as revenue / PAT figures, since we don’t know if foreign subsidiaries were really audited and it falls between the regulatory cracks. (did not SV promise to put up the audited figures of the subs in about 2 weeks of AGM on 29 Sept?)
The reliable tax figure is for the Indian parent, which is about Rs 2.5 crore .
The best interview so far, I think Niraj Shah and Darshan Mehta have done a great job. More importantly the role played by @Nasirul in uncovering the forgery is also credited.
This was indeed a good interview. All the questions in the interview were asked at the AGM. Good to have a public record of the answers.
I may be too naive, but the answers looked credible to me. But the market is still not responding. We need to see the answers put in action (like common auditor for all subsidiaries, financials of subsidiaries published etc). The carnage may continue till then.
. Another point is that the press release yesterday said “Ramani informed me that he has received a proposal wherein I can get some funds for a short duration for private investments in other business ventures without even creating a pledge on my shares and hence he was dealing with these brokers through an intermediary for arranging this private financing,” betraying the fact that he indirectly pledged his shares in quite a clumsy manner.