I checked the MCA website for prosecution for the following companies and couldnt find anything. Im also trying to find out if sfio is investigating…
If the auditor really did its job properly on this fraud, it must have provided a report to MCA irrespective of the board reply:
- In case the auditor fails to get any reply or observations from the Board or the Audit Committee within the stipulated period of 45 days, he shall forward his report to the Central Government along with a note containing the details of his report that was earlier forwarded to the Board or the Audit Committee for which he has not received any reply or observations within the stipulated time.
- The report shall be on the letter-head of the auditor containing his postal address, e-mail address and contact telephone or mobile number and be signed by the auditor with his seal and shall indicate his Membership Number and be sent to the Secretary, Ministry of Corporate Affairs in a sealed cover by Registered Post with Acknowledgement Due or by Speed post followed by an e-mail in confirmation of the same.
- The report shall be in the form of a statement as specified in Form ADT-4.
Source: Reporting of Fraud by Auditors under Companies Act 2013
Other minor observations:
The auditor resignation letter to 8k was dated 30 April. But was reported to MCA on 4th May. It should have been done within 2 days.
I checked the IndiaPost tracking for the registered post, it shows the status as “item booked” but it should have been “Delivered”.
People attending the AGM should ask the management regarding action taken by the MCA/SFIO, if any.
But it’s unlikely that the management will reply as they have already distanced themselves from 8K Miles Media.
I also checked on www.watchoutinvestors.com but could not find anything related to 8K Miles Media.
There is no ADT-4 on the MCA website, unless Ive skipped a document. I think someone this board had downloaded all documents. Can you please check if you can find the ADT-4?
Uday, if you have paid to download these forms from MCA website, then it is for your use and not for public sharing. This is a private company and MCA gets paid for such services.
How you created this charts ? This is wonderfully represented. Is there any template present ? Could you please share with us ?
I’m not aware of any restrictions on redistribution of the downloaded documents.
Is anyone else attending the AGM. Please PM me if you want to coordinate before the meeting begins.
Below is the excel template. It had already been shared - unfortunately I am not able to edit the old link to update the excel.
Thanks to:
Screener.in for the raw data
@suru27: for original excel template.
@Yogesh_s: for the idea on presentation layout.
T - 8K Miles consolidated.xlsx (545.1 KB)
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Absolutely! Observe a phenomenon, develop a theory, and apply it to predict such future phenomena as they develop. And improve.
If you are presuming that an alleged or actual wrong doing will be caught by authorities, please change that presumption.
Auditor may have complained, but it is really in no one’s interest to take action. Enforcement authorities in India act almost only on approval from higher ups (or incentives to themselves, which can be easily managed), higher ups usually will act if there is lot of noise, or serious systemic risk, or on political orders. Resources are very thin and expertise poor.
A case in point is Satyam, where even after a full blown confession, it took years for authorities to act, and the only shareholders compensated were the ADR holders, under SEC! Sad but true. I followed closely the Geodesic case of a $ 125 million default on FCCB and some bank loans. (BTW, they also had amazing talent and were paying salaries on time). It took 5-6 cases, with date after date, filed by Citibank, the FCCB Trustee, HDFC Bank, some guy from Nashik, some civil, some criminal, to ultimately lead after 5 years to arrest. The company was ordered by the Bombay HC to be liquidated, but what would come of it? Nothing.
In this case, the Promoters will say 8K Miles Software Services shareholders have nothing to do with 8K Miles Media, so these questions are not relevant and won’t be taken at the AGM.
It will take an iron will and a relentless pursuit to even ‘prove’ wrongdoing, even when everyone knows who did it. And if there are distributed shareholders each with a loss that is bearable in face of contemplating a legal course, the wrong doers will get away. Think about NSEL, they are still fighting, and those guys are real fighters. The entire process of seeking justice in India is a travesty and a tragedy. And the counterparties know it 
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One more qs for AGM:
100+ Cr loaned to 8K Miles Media should be reversed immediately to restore trust. What are the mgmt views on this?
Page 181 of AR says
Advances outstanding at the end of the year
8k miles media private Ltd. - 0 cr
8k miles media group - 58. 0844 cr
8k miles media group - 07. 3177 cr (interest)
I agree they should not loan the media group anymore to gain back trust.
Mr Ramani resigns as CFO from 8K Miles !
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This looks to have been done in a hurried fashion so that Ramani doesn’t attend the AGM and any and all questions pertaining to 8k Miles Media and Ramani can be brushed off. Astute move. Well played, I guess.
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He holds 83.60% in 8K Miles Media Pvt. Ltd. He just resigns a day before the AGM to wash off responsibility. Also, fraud that came to fore was committed by 8K Miles Media Pvt Ltd, where he is majority shareholder and Suresh was also CEO. The template of fraud is so old. Needs some modification.
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There are red flags. Then there are RED FLAGS! I do not understand how some of the investors still keep believing that 8k is off to some good. Pls look at the history of how many such companies existed before and where they are now (HOV, Helios, Aftek, I can literally name dozens). There is always some reason, but the end result is the same that investors loose everything. This time it may be different, but the probability of that happening at this moment I think is very minuscule. And when everything is lost, you have only yourself to blame as sufficient warnings have been posted here for a long time!
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Not sure if resignation is a solution or even appropriate.
It is rather unfair to assume malicious intent on the part of forum members - most want clarity around the intrinsic value, the actual business model and nos. / cash flow. If there is wrongdoing, it needs to certainly be pointed out and addressed one way or the other, so investors / good businesses can be protected & benefit over the long term.
Point 1 is unlikely to happen. They would say that all subsidiaries are being operated in compliance with local regulations and that unaudited (or locally audited, if required by local law) statements would be attached as applicable.
On a related note, look at TCS’ fully audited report on subsidiary financials. This is the level of transparency and detail that can earn you investors’ trust for a lifetime.
The AGM was eventful with many questions. And I think the management did fairly well with some convincing answers. Some of the main highlights:
- They are in the process of making Delloitte the sole auditor for all subsidiaries. They did not commit on the timelines but said that they are undertaking efforts to do at the earliest. Delloitte has already visited some of the subsidiary offices in US and gathered information.
- The audited detailed financial reports of all the subsidiaries for FY 2017-2018 will be made accessible in about two weeks.
- Hired a investor relations firm to increase investor confidence. This firm will be responsible to interact with institutional investors and also respond to emails from retail investors.
- CEO has repeatedly stated that convincing institutional buyers to invest is his top priority.
- He will be in India for the next 3-4 weeks meeting analysts and investors.
- On the issue of long delay in trade receivables, the company has not written off any revenue in the past five years showing 100% recovery.
- Reason given for not paying dividends: As most of the revenue is generated outside India, bringing back that revenue to India has huge tax implications. They are looking at various ways to tackle this problem, including having an entity in Singapore where the tax implications are very low, issuing ADRs and so on.
- CEO informed that they will not make any new acquisitions for the next 18 months from internal accruals after completing the acquisition that is in progress. He stressed on the term internal accruals after clarification was sought by investors. They may raise external funds if some compelling acquisition target comes along. They want to improve cash flow substantially.
- Did not give very convincing answers on the reason for CFO selling the stake and loaning it back. He said that selling stake and loaning to the company happened at very different times.
- Suresh has categorically stated that he has not decreased stake in the past one year.
- They have collected all the “rumors” (they call them rumors) that are circulating on social media and will send consolidated responses to the exchanges. They are formalizing the responses with their accounting and legal teams.
These are the important points that I remember off the top of my head. I’ll add more if I remember.
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Many thanks for the update Uday 
Shows the company in positive light.
Points 1 and 2 are huge plusses
Point 7 Was there any update ,if the company would do “share Buyback” as they cannot pay dividents due to reason mentioned
Was there any clarification about Mr Ramani coming back to stake as CFO. I hope he does not make a comeback ,as I believe,there are more doubts about him rather than anyone else in the company?
Will be awaiting the Concall Transcript
PS: I dearly hoped that the AGM would not go well and I can sell my shares.But this AGM again gives me hope
Things said at AGM:
1- addressing the issue regarding investor communication by appointing adfactor as the IR
2- 8K media allegations are baseless & CFO has stepped down to focus on legal action on the accusations
3- US subsidiary is audited by another auditor and they are planning to bring Deloitte for the audit of all its entities
4- Has won many new clients and are making significant development in exploring different geographies. (For ex- They have set up a office in Singapore for the same)
5- They will be addressing to all the rumors very soon in an appropriate manner and are very much aware of the accusations made on them.
6- Will be uploading US subsidiary financials in next 2 weeks.
My take- Did all my queries were satisfactorily answered? NO ! But next one month will be crucial to see as to what kind of communication is management putting forward to address the issues.
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