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

Stock Opportunities
825

Have shared my thoughts on different topics discussed on 8K today. Hope my analysis is useful.

As mentioned before in this board, i have visited their office and spoken to couple of people during meetup events earlier. I only saw positiveness whenever i spoke to their experienced employees.Out of 600+ employees, 26 reviews in glass door and that too 6 negative reviews is not sample to discuss at all. every company will have unhappy employees, freshers during appraisal and they vent out in glass door. If there are 300+ reviews for 600+ people company then it needs to be analysed. else ignore.

Salary was delayed by 2-3 days in 8K miles chennai in two instances in last 3 years. Once during the annual appraisal period and another when their payroll provider was changed last year. this is normal to most of the organizations and i dont see red flags.

One of the senior boarder phreak pointed out 8K miles has expertise only in cloud migration and rudimentary automation but has nothing to do with AI/ML/Block chain. Iam not a financial specialst but surely experienced in the technology 8K miles is working on. Thats why i invested on them. Same way I am a fan of phreaks financial analysis posts.

Cloud transformation is one of their main business, it involves cloud architecture, cloud migration, serverless, engineering , automation, devops and Next gen managed services.

Cloud Migration: Low hanging fruit. Every cloud solutions company including our Big 5 does this and 8K also does this. they have hundreds of customers on this.

Serverless: One of the meetups i attended on 8k office was co hosted by 8K engineers and Amazon on Servless and they were discussing a GE healthcare customer case implemented by 8K on Servless. Customer GE. Vendor 8K

Cloud Transformation: I heard from their architects that they are involved in entire Novartis IT cloud transformation Journey for last 3 years for multi cloud. Cutting across cloud Security, Architecture, Automation and Next gen managed services. Next Gen Managed Services is a competency certification provided by AWS after deep technical evidence and customer proofs that 8K miles is using Machine learning algorithms to operate its cloud managed services. This is not a normal Managed Services program, please understand. 8K miles is also the core team that is involved in setting up a peta byte secured Big data cluster for Novartis for some pharma analytics. This SECURED Pharma big data cluster i heard is first of class for Novartis and Amazon. Heard this from Amazon rep. Customer Novartis. Vendor 8K.

DevOps + Automation: For Roche, 8kmiles has built a Multi region, Multi Cloud Devops pipeline platform using HPC clusters. This is like a science cloud where roche runs their genomics. Also built on AWS, Azure and Google Cloud. This i heard is a first of class in AWS globally. Customer Roche, vendor 8K.

Cloud managed Services: In Trimble, they are engaged on multi year Devops and next gen cloud managed services. Customer Trimble, vendor 8K.

Above clearly shows they are deep into cloud in following aspects like Cloud Transformation, Serverless, Next gen Managed services using ML, Automation and devops. I have listed with the customer names and the work they are doing for them after my discussions. You can cross verify this with any of 8K miles architects or with Amazon or if you have friends in their tech team. It is clear from the work (if you deeply work on this field) they are not like any other normal cloud player and very advanced. Thats why Amazon , Azure and Google recognizes them very well.

Please attend their webinars, meetups and talk to their tech people before classifying them.

Have already covered my thoughts on Cloud/ML areas . I am currently gathering the information on AI / Block chain.

AGM thought. Many of the questions i wanted ask is already discussed. but i have a suggestion :
If the question is not framed correctly, Their management can say 8K media questions are strictly out of scope of 8K Miles software services Ltd meeting. Suggest one senior boarder to coordinate with others and ask this properly.

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826

People are still talking about business model and Fundamental, when fraud has already come to light. Even if they have an iota business investors won’t get anything.

Anybody remembers Arvind Remedies, Rei Agro, Anil Ltd & many more. Regulatory authorities do nothing or even if they do something it’s too late & mostly useless for safeguarding your money.

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827

What fraud has come to light? An allegation has been leveled by fired auditor that his letter has been misused.

All the facts have not come to light and many possibilities exists. Don’t you think?

828

Not Invested. Following the thread to understand if there is any fraud.

A few boarders have recently joined (just a couple of weeks ago) and have commented on this thread only.
Couple of them (have) posted within 2 hours of joining the forum.

May be they are genuine investors, may be not. Cannot prove.
But I urge the readers to weigh in the profile of the poster with the content they publish.

As it is a public forum, caution is advisable on the part of the reader.
I assume the management is following this thread; and posting questions intended for them at the AGM will help them prepare and rehearse, rather than being spontaneous.

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831

In case one wants to learn from history, listing down few companies only from tech or so called edutech (yea, edutech looked cool those days) which looked at its prime and then fizzled out. You will find many similarities:
Core projects and technologies
Everonn
Educomp
Glodyne Technoserve
Allied Digital Services Limited
Omnitech Infosolutions
Geodesic
Pentasoft
Teledata Informatics
SSI

Glad I worked for few months in one such organization and got life learnings later validated through academic readings with some live case studies in market :slight_smile:

And yes, before one calls it hindsight bias, kindly remember that a repetitive hindsight bias is nothing but pattern and those patterns lead to foundations for buzzwords like machine learning n artificial intelligence which some of these companies boast of. :slight_smile:

Note : Many of these companies do not even trade today where as just 8-10 years back they were in the hottest areas of technology , featuring in deloitte asia top 50 n what not. 10 years is a very long time in market it seems but people like me who learnt their 1st lesson , paying tuition fee, mano kal ki baat ho…

Baaki sawari apne maal ka khud jimmewaar hai :stuck_out_tongue:

On this company, i think a year back , had given my views n warned in whatever ways i could n i think @phreakv6 @diffsoft have been raising key warning alarms regularly. Dont think any of us do because we are interested in a bull bear game, its just because equities is not only about where to invest but its more about where not to invest - " All I Want To Know Is Where I’m Going To Die So I’ll Never Go There" . So, before we say “when you are not invested, why are you wasting your time here on this thread”, think again my friend.

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832

Yes, that is true. But that surprises me. This means he did not know about the resignation letter of auditor otherwise he would have resigned earlier.

On standalone basis company has almost no business. Standalone revenue for fy18 is around 5 crore. Therefore question of Indian business sending money abroad does not arise.

Look at the borrowings of the company.

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Out of total 62 crore, 37.5 crore are lend by Ramani, therefore no question of sending Indian bank money outside comes into picture.

Now, look at the loan of the company. No loan on standalone basis (Indian company) is given to 8K Miles Media.

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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.

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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.

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?

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.

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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?
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840

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

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@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.

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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.

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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.

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.

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.

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.

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

858

All of this is in hindsight:

Almost all the stats turn out to be excellent; hardly anything stands out as troubling.

Fig 1 - Source Screener.in - Errors, if any, are mine.

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In Fig 2 - the RoIC is excellent. However the last 3 graphs show signs of caution/danger.
Declining FCF but a strong CFO. Amber flag.
Rising Sales, Rising Debt, Rising Receivables. Red Flag.
Extremely diverging RoIC vs CRoIC. Red Flag.

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Read a quote today - ‘Top-line is vanity, Bottom-line is sanity, Cash in Bank is reality’

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