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

The document link was a Google drive link and not the MCA website link. It would be good to see the verification. The last time I fact checked an article on 8k miles annual report, I found it to be factually incorrect. Hence I’m doubting this source as well as its not yet verified.

My point was anyone can visit the MCA site and download the document - forensic analysis not required as the source (MCA) is open to all.

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@Altruist can you please help me find the link on the MCA website. I tired but couldnt figure out how to navigate to such filing information.

Yes. Create an account. Find CIN of the Company under Company Services. Then go to View Public Documents under Document Related Services and enter the CIN and search for attachments under year 2018. There is a resignation letter uploaded on 07-May which should be the document being circulated. You can pay a very small fee (Rs. 50 or so) to access all the documents.

Interestingly, while navigating the portal now, I noticed that there has been a change of directors today. :slight_smile:

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Please see the screenshot from the MCA website. The Form ADT-3 which seen to be filed on 18/05/2018 is for resignation of auditors, so the letter doing rounds is not forged. No auditor will file a fake resignation letter with the ministry.

All the seen documents can be downloaded from the MCA website for verification by paying a nominal fee.

It is also seen that subsequent to filing of above letter, there is alteration in equity capital.

The auditor resignation letter is authentic. I have downloaded it from MCA website. Attached for reference.

Today Suresh Venkatachari resigned as director of 8K Miles Media. Attached documents for reference.
I have downloaded other documents as well. I can share if anyone wants.

20180518.pdf (3.6 MB)

Changeindirector_5.pdf (29.2 KB)

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Thanks.
The PDF (resignation letter of auditor) has two digital signatures, both of which are valid. So, there should not be any ambiguity now on the authenticity part.

Meanwhile the other PDF talks about ‘personal reasons’. Considering the timing of the events, isn’t it very obvious that the director is now trying to distance himself from the company as a damage control exercise (perhaps after getting legal opinion)?

I could not open the resignation letter. Instead it is showing


Also if you could upload P&L and B/S. Thanks

@Gaurav_Agarwal - You will need Adobe Reader to open the document as it has some proprietary elements.

I validated the digital signatures and they are genuine. You can see the signature on the left pane by Mr. Haresh and then from Mr Ponraj on MCA side.

I have validated these signatures as well (see left pane). It shows that the reason for resignation field was indeed filled by the auditor himself.

You can also view the version the auditor first submitted as well which has the reason field.

You can view the attachments which are part of the pdf as well here.

23%20PM

When I clicked Open, it opens to the same file posted here earlier.

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From their communication i always believe they had right intent but poor execution team in certain corporate functions if you closely watch them. First an article of Nitin dharmawat came on 2014 highlighting 8KMiles corporate governance issues. They fixed most of them and improved. It was good sign. Next the ambit report came highlighting certain other corporate governance issues 2015/16. They could have brushed aside this with strong PR , but they atleast had right intent to accept and improve by bringing Deloitte for auditing. Surely transparency had increased after deloitte if you compare their BSE notifications, AR etc. It was a again good sign beacuse they had intent and wanted to improve. In the current episode, Iam actually surprised at last statement in the clarification given by the company. How can 8K miles software services ltd ensure that board of 8k miles media is looking into this matter. I think their governance is very incompetent to issue statements like this. It is so stupid.

In this chaos I also did an analysis last week on their capabilities further deep. Please look at consulting partners section in each of this link. 8K miles is listed in top 10 in all below. Very less competition.



https://aws.amazon.com/devops/partner-solutions/

Lifesciences and Healthcare is a multi Billion dollar opportunity worldwide and AWS certifies only 10 partners globally who are capable of doing work on cloud in these industries. This essentially means their Technical, Competency, Enterprise delivery, Sales capabilities are top notch to break into top 10 league. They have also proved this by opening and executing large deals with Novartis, Roche, Actelion, Shire pharma, Lupin, Life cell, GE healthcare etc. Name in this list also means AWS will refer 8K miles to the potential enterprise opportunities in these industries. They are sitting and executing projects on gold mine in short and very less competition. On the contrary from the above incedents we can clearly observe their finance, corporate governance is big let down. If the company is fully bogus it is acceptable they go down the drain, but such a talent, competency exhibited and going down beacuse of their finance and corporate governance let down is very pathetic. Boarder should ask strong questions this AGM, at least i hope they will correct their path one last time.

Pros : Competency, Technology, Enterprise Delivery, Sales , Vision
Cons : Finance, Corporate governance

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Looks like I have to eat my words…

Destroying an 800cr business for 47cr is just stupid and unfortunate. Does anyone have any idea about the legal implications. How does the process/prodecure unfold in such cases. Its been almost 5 months post the accusation and no investigation initiated against Suresh Venkatachari.

I remember this quote from buffet “Better to invest in a bad business run by good people than a good business run by bad people” looks like this is the latter case.

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@phreakv6 you are killing us with such details :)))

@udayp thank you for sharing the letter. It is amusing to see the letter typed by Mr Venkatachari in his personal capacity, but on the the company letter head! A company, being a legal person, is thus speaking the voice of a natural person. Looks like ventriloquism.

Besides, looking at some other filings, the letterhead is different. Further, all the recent filings and transactions in 8K Miles Media shows huge funds flow that sings another story.

And until atleast 24/05/2017, Mr Venkatachari was a 50% shareholder in 8KMiles Media Pvt Ltd.

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Ramani sells stake at elevated valuations (after false dividend announcement and false claim by Mr.Venkatachari that they will consider increasing stake etc.) and loans the money (unsecured) back to the company of 37.5 Cr. Loans are given to 8K Miles Media and then subsequently siphoned off. Follow the money and the story is clear as day.

We keep thinking of 2000 Cr company or whatever but these promoters are only thinking of a 5-10% stake that they can sell at as elevated a valuation as possible. The same story has played out in slightly different fashion - on a grand scale in Vakrangee/PC Jeweler, smaller scales in Fiberweb, Ujaas (same story of promoter selling about 10% stake for loaning it back to the company!) and so on.

History keeps repeating itself. Always be wary of stocks where story seems too good to be true along with promoter/PAC/benami stake coming down, along with the price. This is the general framework but the intricacies are very different in each case.

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@phreakv6 Thanks for details on resignation letter.

Ramani sold his stake on 20-May-17. The price were most elevated in Dec/Jan-18 and not May-17.

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I will say we still do not know that loans given to 8K Miles Media are siphoned off. Remember the same auditor was signing the company’s books for many years. This could very well be an act of vengeance. We need to dig more to know the full story here.

As @ragha1982s put it the company has pros & cons. I think the CEO is pure technology guy and a good one and does not know much about corporate governance, finance & investor relations. The company need a professional CEO.

I am not still ready to rule out the company. Nor do I think that all revenues numbers are botched-up.

I have a very simple query :slight_smile:
Why there is no dividends declared by the company in past except only in 2017 (which was too low)
Why company do not announce Buyback to instill confidence and prove that the money is real.
Note: Vakrangee , PCJ and DCM Shriram announced Buyback when prices were falling but then Vakrangee and PCJ backed off (As they too does not seem to have real cash) and DCM Shriram went ahead with the buybacks. See today’s price of all these businesses.
Why company gave loans to Related party at just 7% rate of interest. Is it that company is happy with 7% returns on its capital. Is it like growing the Private company with cheaper loans at the expense of Public Company.
Why too much frequent equity dilution by the company and Sudden increase in debt by 80 Cr in last 2 Year.
Company paid 11 Cr interest on borrowings of 80 Cr which corresponds to 12% Interest Rate last financial year .

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He also sold in Jan '18 for about 50 Cr. In all, the promoters cashed out about 120 Cr.

All this time the justification was that Suresh Venkatachari was not selling and he was appearing on TV often and talking up the stock.

There were similar arguments in Lasa when one single entity was split in two and when both sold stakes the justification was that the father was selling in son’s company and son was selling in father’s company and that’s ok. Similar arguments were made in Fiberweb when the promoter claimed that he didn’t not know the related entity which was selling stake. This related entity in fact had his own wife as a director in it. I see this case as something very similar to the above two. 120 Cr is not a small amount, especially if the actual profits the company was making was, say a third of this amount and not as reported. Why would I make such an allegation? Put yourself in the shoes of the promoter and ask why they would be selling stake at such cheap valuations (expensive as of current market cap) for a company that was making money hand over fist.

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He has already clarified this numerous time as to the reason for Ramani’s stake sale ! People have already understood it and moved on to other things long back.

I think they needed money for Cornerstone Advisors acquisition, that is why they sold the shares and loaned the money to company. I still believe so.

In case of 8K Media, shouldn’t we wait to know the source of fund repatriated from India? To me it looks like the poor guy Suresh did not even knew about the resignation of auditor, till it came out in open.

I agree it is grey.

In that case, the promoters are implying that the cost of debt is more than the cost of equity. Bit strange for a company with a RoE of 42%.

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I agree with your point. No denying. But you will agree real life decision are not always based on strict return/mathematical basis.

Do you believe all the revenues are fake? All the customers mentioned in all previous post on thread does not exist.