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!!! W E L C O M E !!!
In INDIA, people generally relate to stock market as “EASY MONEY” or “SATTA BAZAAR”. For them it’s purely a GAME or matter of sheer LUCK and nothing more than that. But seldom do they know, by following certain PRINCIPLES and taking INFORMED decision, this same platform has the power to take them from rags to riches. No doubt, it has a certain amount of RISK attached to it. But every business or investment has it. What more, the Finance Ministry has already made the long term capital gain as TAX FREE whereas the short term capital gain is taxed at merely 10%. On the economic front, India’s GDP is growing and is expected to grow at scorching pace of more than 8%. Unfortunately, even today our market is being ruled and dominated by FIRANGI’s money. But I can see, the day is not far when our general PUBLIC will change its perception and start putting MOST of their savings in equities as an ** Investment **.
Remember, "K N O W L E D G E" and "P A T I E N C E" are the key to success.
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Thursday, December 28, 2006

Helios & Matheson - Rs.137.00

Founded in 1991, Helios & Matheson Information Technology Ltd. (HMITL) is a leading healthcare focused IT Services company based in south Bangalore. It offers is the most comprehensive range of services in the industry that span the entire software services lifecycle from application development and integration to application lifecycle management. It offers competencies in application management services, business & technology consulting, application outsourcing, ITES- BPO services, offshore delivery, project management services, public sector services, maritime practice, enterprise security & privacy practice and executive education info systems. It has been ranked among the 30 fastest growing IT companies in India as per NASSCOM ranking 2005. Its clientele includes reputed names like Delta Dental, Johnson & Johnson, Wellcare, Cisco, Toyota, Texaco, Mitsubishi, IBM Global, Seagate, Walt Disney, Natsteel, ABB, Accenture, Citicorp and Pepsi among others.
HMITL has a worldwide presence through subsidiaries in USA and Singapore and via strategic acquisitions of growing and dynamic infotech companies in USA, UK, Canada, Singapore and India. In the last couple of years it has made various acquisitions including The Laxmi Group and Maruthi Infotech of USA and Systematic Solutions in India. To further strengthen its healthcare presence, it acquired a controlling stake in a 23-year old NASDAQ listed company ‘The A Consulting Team Inc.’, New York. Apart from its strong on-site presence, the company also has an extensive offshore infrastructure comprising offshore development centres in India to provide world-class solutions to clients worldwide. Last fiscal, it has added several strategic clients who have the potential to grow into multi-million dollar accounts. Currently, it employs around 1500 people. However, its plan to takeover Three Vmoksha Company didn’t work out and the company has claimed Rs.50 cr. from it for loss of goodwill. To fund its infrastructure development and other strategic acquisition plan, HMITL recently raised US $25 million (around Rs.110 cr.) by way of bonds through the FCCB route to be converted at Rs.162 per share. Interestingly, it holds cash of more than Rs.140 cr. against it current market cap of Rs.280 cr.

Given the phenomenal rise in IT investment by companies in life sciences, healthcare insurance and health maintenance bodes well for HMITL. For H1FY07, it reported a topline of Rs.184 cr. up by 80% and bottomline of Rs.27 cr. against Rs.17 cr. on a consolidated basis last year. Driven by a strong European and US presence, deep client relationships, a powerful suite of services and a seamless global delivery model backed by investment in infrastructure, HMITL is on a strong growth trajectory. For the full year FY07, it may register consolidated sales of Rs.375 cr. with net profit of Rs.55 cr., which works out to a consolidated EPS of Rs.20 on its fully-diluted equity of around Rs.27 cr. Investors are strongly recommended to buy the HMITL share at current levels with a price target of Rs.210 (50% appreciation) in 9-12 months.

9 comments:

Prasanth said...
This comment has been removed by the author.
Unknown said...

helios and matheson is a paper company. they just cook profits and fool the investors. share price will go down to 6 rupees within a couple of months.

Anonymous said...

As against what is mentioned in the article for H & M Vmoksha acquisition the real story is something else.


FOREIGN EXCHANGE DEPARTMENT
(FID)

Complaint against State Bank of Mauritius & others by - VMoksha Technologies – Mauritius



A complaint was received by our Department of Banking Supervision

1. It was agreed between these two companies that H&M will acquire the 100%

Shares of VMoksha Technologies Pvt. Ltd. (India) held by VMoksha Technologies – Mauritius (VTM) for a consideration of US$15 mn. It was also agreed that the transaction will be completed within 120 days i.e, before 09.9.2005 and the consideration will be first transferred to VMoksha Technologies

2. H&M immediately issued a press release stating that their company had acquired VMoksha Technologies in a complete cash deal of US$ 19 mn which resulted in to increase in share price of H&M on the Stock Exchanges around Rs. 100 to Rs. 500 in a period of 3 to 4 months.

3. Subsequently instead of crediting the acquisition proceeds to the account of VMoksha Technologies maintained with HSBC Bank, the proceeds were credited to VMoksha Technologies account with State Bank of Mauritius at its Mauritius Branch. It was then observed that this account was purportedly opened in a fraudulent manner by Shri Pawan Kumar – the then CEO & Chairman of VMoksha Technologies with the help of two person’s i.e., Chairman & MD of Helios & Matheson.

4. Shri Pawan Kumar also applied for a loan of US$ 13.5 mn with State Bank of Mauritius – at Port louis branch at Mauritius. This amount of loan was immediately sanctioned by the bank against personal guarantees of two persons i.e, Chairman & M.D of H&M (A FEMA Violation).

5. However, the issue relating to State Bank of Mauritius – Port Louis branch sanctioning loan to VMoksha technologies Mauritius against a personal guarantee of two resident Indians i.e, Chairman & M.D of H&M, it was advised by Mumbai branch of State Bank of Mauritius that through inadvertence, RBI’s prior approval for such guarantee was not obtained.

Anonymous said...

THIS IS A COURT ORDER WHERE HONORABLE MAGISTRATE CONFIRMS THAT HE FINDS SUFFICIENT GROUNDS FOR PROCEEDING AGAINST H&M & OTHERS FOR CHEATING, FABRICATING & FORGING OF DOCUMENTS ETC.

IN THE COURT OF THE ADDL.CHIEF METROPOLITAN MAGAISTRATE
47TH COURT, ESPLANADE,MUMBAI.
CASE NO.177/MIS/2006


Shri Rajeev Sawhney ..COMPLAINANT

VS

State Bank of Mauritius, Helios & Matheson & Ors. ..ACCUSED
V. Ramachandrian / G.K.Muralikrishna

ORDER BELOW THE COMPLAINT:

1 Heard the Advocate Sabnis for the complainant.

2 The record is seen. It appears that the complainant and the accused No.4 were the share holder of Vmoksha Technologies Ltd and the agreement was reached between this company and accused no.5 Helios and Matheson Information Technology Ltd. For selling of the shares. It appears that thereafter the account was opend in the bank by committing forgery and the application for loan was made in the name of the company of the complainant and the loan so obtained was transferred in the name of accused no.5. An attempt was made to show that the payment of the share was made thus by obtaining the loan in the name of the company of the complainant.

3 I find sufficient grounds for proceeding against all the accused persons for the offence U/sec. 120B, 420 read with 120B, 465 r.w. 120B, 467 r.w. 120B, 465 r.w.120B, 467 r.w.471 r.w.120B and 403 r.w.511 r.w.120B of Indian Penal Code on payment process fees.

4 Issue summons accordingly. Returnable on 20/4/2007. The list of witnesses is given.
(M.Y.Mankar)

Addl.Chief Metropolitan Magistrate,
47th Court, Esplanade, Mumbai
18/1/2007
fsk

Applied on: 19/1/07 TRUE COPY
Granted on: 19/1/07 Judicial Clerk,
Ready on: 24/1/07 Addl.Chief Metropolitan Magistrate,
Delivery on: 24/1/07 47th Court, Esplanade, Mumbai

Sabnis
Chambers of Shri Mahesh Jethmalani

Anonymous said...

We are all aware that in todays market conditions no IT Company can be potraying such huge profits with the Indian Rupee having strengthened by more than 18 to 20%. Huge profits can only be achieved by faking revenues and profits. We are all aware that H&M does not have 1600 Employees which they potray.
We are also aware that the promoters are not IT profesionals but just accountants who try to juggle around with the figures in the balance sheets with the assistance of a very small audit firm with hardly 5 to 10 employees. The audit firm Venkatesh & Company has been their auditors since inception of H&M.
This Audit firm Venkatesh & Company were auditors of another fraud company 'Royapettah Benefit Fund Nidhi Limited' which cheated the poor investors for Indian Rupees 500 crores. So this is the background of H&M's Auditors.
In 1991 H&M was earlier named as Express Financial Services involved in Money Changing (Money Laundering Activities) So the promoters are good at this from its Inception.
In 1999 when the Dot Com boom came the Promoters of H&M found this to be a great oppurtunity to escape and take cover of being an IT Company and changed their name to Helios & Matheson.

Before this companies episode becomes another DSQ Software it may be in the interest of all to keep away / keep our hands off this company H&M

Anonymous said...

Helios & Matheson North America Inc Listed on Nasdaq involved in Money Laundering in India Listed on BSE,NSE as Helios & Matheson Information Technology Ltd - Chennai
_______________________________________________________

I am a shareholder of Helios & Matheson. I would like to share with you the following information on them:

Subject: SystemLogic Solutions Ltd - A Subsidiary of Helios & Matheson Information Technology Ltd

Internet Jewelry Firm Files $14 million Suit Against USWeb
By , The ClickZ Network, Jun 11, 1998
Articles | Contact | Subscribe

USWeb Corp. and one of its affiliates are the targets of a $14 million
lawsuit alleging breach of contract and fraud filed by anOrange County, CA
corporation in Los Angeles Superior Court.
The charges also include negligent misrepresentation, unfair competition and
false advertising on the Internet.
The lawsuit was filed by Larmark Inc., a Huntington Beach, CA-based
marketing company, against USWeb; its affiliate SystemLogic Inc.; based in
Santa Monica, CA; USWeb SystemLogic LLC., a subsidiary of SystemLogic; and
Kumar Rajha, owner of SystemLogic and USWeb SystemLogic.
According to Michael J. Emling of Emling & Associates, the law firm that
filed suit on behalf of Larmark, the lawsuit seeks $257,785 for fees paid by
Larmark to the defendants for services not provided; $300,000 for lost
business expenditures; $13 million for future loss of revenue; and legal
fees and court costs. The suit alleges misrepresentation and fraud, as well
as breach of contract.
Larmark was founded in 1997 to establish an Internet site that would be
dedicated to the jewelry trade. By purchasing memberships from Larmark,
jewelry retailers and wholesalers would be able to display and sell their
merchandise in a Web store. Larmark had secured the domain name,
"JewelryChannel.com."
Based on its advertising and promotional materials on the Internet, Larmark
selected USWeb and contacted its office in Santa Monica.
The lawsuit says that Larmark entered into a $277,055 contract with USWeb
SystemLogic and, subsequently, on Dec. 12, 1997 received a "project plan"
that set out "milestones" for the work to be done and included completion
time deadlines. The plan called for a "functional working model" to be
completed by Feb. 2, 1998, and the entire project by April 6.
By the time the project was to be completed, Larmark reportedly paid 93% of
the contract. When the due date arrived, Larmark allegedly was informed by
USWeb SystemLogic that the work was not done because of the quantity and
quality of the personnel assigned to the project. In early May, Larmark
contacted USWeb at its corporate headquarters in Santa Clara, and requested
it complete the project. When USWeb failed to act, the lawsuit was filed,
Emling said.
Due to the alleged failure of USWeb and its affiliate to complete the
project, Larmark said it has lost the opportunity to participate in two of
the three most important annual national jewelry trade shows, which were
held in Las Vegas. The third critical trade show will be held July 18 in New
York.
"These lost opportunities undercut Larmark's ability to meaningfully conduct
business for one year," Emling said.
There was no immediate response fromUSWeb.
http://www.clickz.com/showPage.html?page=6801

Anonymous said...

Sub:- Technical Scrutiny of Balance Sheet of M/s.Helios & Matheson
Information Technology Ltd. – Report u/s 234 (6) of the Companies
Act, 1956 (the Act) – Fast Tract – Reg.
H&M had entered into share subscription agreement on 11.5.2005 and the said agreement at para 2.1 & 2.2 stipulated that the company will issue and allot to the investors viz., Vmoksha, Mauritius and others 8405520 redeemable preference shares of Rs.10/- each at a premium of Rs.65/- per shares. The funds to the extent of Rs.63.03 crores for allotment for the said preference shares from Vmoksha was received on 28.6.2005. The perusal of the company's document relating to MOA reveal that as on 11.5.2005 as well as 28.6.2005 the company's MOA contained authorized share capital of Rs.15crores consisting of 1500000 of equity shares of Rs. 10/- each only. Therefore, it is clear that as on date of execution of the share subscription agreement as well as date of receipt of the money for the said redeemable preference shares, company's MOA does not contain any Authorized capital of the nature of preference share capital.


In the EGM held on 20.7.2005, the company has passed the following resolutions :-

(1) Increase in authorized share capital of the company.

(2) Alteration of MOA of the company.

(3) Alteration of AOA of the company.

(4) Issue of redeemable preference shares.

(5) Raising of additional long term resources through issue of FCCBs/GDRs.

The Notice dated 20.6.2005 and explanatory statement to the said notice of the EGM is enclosed herewith. The resolution are reproduced hereunder :-

Increase in Authorised Share Capital of the Company

1. To consider and if thought fit, to pass with or without modification(s) the following resolution as an Ordinary Resolution

"RESOLVED THAT PURSHAT TO Sec.94 and other applicable provision, if any, the Companies Act, 1956, the Authorised Share Capital of the company be increased from 15,00,00,000/-(Rupees fifteen crores only) divided in to 1,50,00,000(One Crore fifty laksh only) Equity Shares of Rs.10/-(Rupees ten only) each to Rs.25,00,00,000/-(Rupees Twenty only) divided into 1,50,00,000(one crore fifty lakhs) Equity shares of Rs.10 (rupees ten only) each and 1,00,00,000(one crore only) redeemable preference shares of Rs. 10 (rupees ten only) each with power to increase or reduce, consolidate, sub-divide the capital in accordance with Companies Act. 1956."

Alteration of Memorandum of Association of the Company

2. To consider and thought fit to pass with or without modifications (s) the following resolution as an Ordinary Resolution

"RESOLVED THAT the existing clause 29(11) of the Memorandum of Association of Company be deleted and substituted with the new clause.

29(II). The Authorised Share Capital of the Company is Rs.25,00,00,000/-(Rupees twenty five crores only) divided into 1,50,00,000(One crore fifty lakhs) Equity Shares of Rs.10/-(Rupees Ten) each and 1,00,00,000(one Crore only) redeemable preference shares of Rs.10/-(Rupees ten) each with power to increase or to reduce the capital and to consolidate, sub-divide the shares and shares of higher or lower denomination and to attach there to respectively preferential, deferred, qualified or other special rights, privileged and conditions attached there to as may be determined by in accordance with the Articles of Association of the company and to vary, modify or abrogate any such rights privileges or conditions or restrictions in such a manner as may for the time being, be permitted by the Articles of Association of the company or the legislative provision for the being inforce in that behalf.

Alteration of Article of Association of the Company

3. To consider and if thought fit. To pass with or without modifications(s), the
Following resolutions as a Special Resolution.

RESOLVED THAT The existing clause 16If) of the Articled of Association of the Company be deleted and substituted with the following new clause

16(f) The Authorised Share Capital of the Company is Rs.25,00,00,000/-(Rupees twenty five crores only) divided into 1,50,00,000(One Crore fifty lakhs only) Equity shares of Rs.10/-(Rupees Ten only) each and 1,00,00,000(one crore only) redeemable Preference Shares of Rs.10/-(Rupees Ten only) each with power to increase or reduce the capital and to consolidate or sub divide the Shares and issue shares of higher or lower denomination in accordance with the provisions of the Companies Act,1956."

Issue of Redeemable Preference Shares

4) To consider and if thought fit, to pass with or without modification(s), the following Resolution as a Special Resolution

"RESOLVED THAT 1,00,00,000 Redeemable Preference Shares of Rs.10/- each forming part of the Authorised Share Capital of the company can be issued at par / premium / discount and allotted to any person or persons, in one or more branches and on such terms as to dividend, preferential payment and redemption as the Board of Directors (hereinafter referred to as the "Board", which term shall include any committee(s) which the Board may constitute to exercise the powers of the Board including the powers conferred by this resolution) may deem fit and that the provisions of Section 81 of the Companies Act,1956 shall not apply to the aforesaid issue and that such shares need not be offered to the existing Shareholders of the Company."


RESOLVED FURTHER THAT the board of Directors or a Committee thereof be and is herby authorized to do all acts and deeds as may be necessary, usual, proper and expedient to give effect to this Resolution including listing of securities in the Stock Exchanges. If necessary."


Raising of additional long term resources through issue of FCCBs/GDRs, etc.,

5. To consider and if thought fit, to pass with or without modifications(s), the following Resolutions as a Special Resolution.


RESOLVED THAT, in accordance with the provisions of section 81(1A) and all other applicable provisions, if any of the Companies Act, 1956 (including any statutory modification(s) or re-enactment thereof) and relevant provisions of the Memorandum of Association and Articles of Association of the company………………………


Explanatory statement to the above resolution is reproduced below:-

Item1 to 3

The present Authorised Share Capital of the Company is Rs.15 crore consisting of 1,50,00,000 equity Shares of Rs.10/- each. To enable the Company to expand its activities for seeking the emerging opportunities for growth , it is considered necessary to increase the share capital of the company to Rs.25crore consisting of 1,50,00,000/-Equity Shares of Rs.10/- each and 1,00,00,000 redeemable preference Shares of Rs.10/- each. Such increase in the authorised capital requires alteration Capital Clause of the Memorandum of Association and Articles of Association. Hence the items no. 1 to 3 placed before the meeting for approval

None of the directors are interested or concerned in the items of business


Item no.4

Inorder to meet the fund requirement it is proposed to offer/issue and allot redeemable non-convertible preference shares. For making preferential allotment, the approval of shareholders is necessary. It is propose to issue about 85 lakhs shares of Rs.10/- each at par/premium/discount to private corporate bodies and individuals on non-converatable basis as Board may fix and determine. For this purpose, the Board may be authorized to take necessary steps as may be required to give effect to this resolution. Hence the item is placed before the meeting for approval. None of the directors are interested or concerned in the item of business.


Item no.5

The company has been examining various growth opportunities from time in line to its objectives of becoming globally competitive. While it is envisaged that the internal generation of funds would partially finance the proposed investments it is thought prudent at this stage for the company to raise a part of fund requirement through the issue of securities in the domestic/international market as set out in the accompanying Notice.

It is therefore proposed to issue appropriate securities for an amount not exceeding the equivalent of US $ 100 Million in one or more branches in such form on such terms and timing and in such manner at such price or prices and at such time as may be considered appropriate by the Board of Directors to the various categories of investors in the domestic/international market as set out in the accompanying Notice.


Your company will work out the mode of financing and utilization plants in consultation with advisers, lead managers and other agencies as may be required subject to the approval of Government of India, Reserve Bank of India, Securities Exchange Board of India, and other authorities wherever applicable. While the fund raising programme may be through a mix of debt/Equity related instruments as may be appropriate, approval of the members of the company is being sought the extent that any part of the abovementioned fund raising plan includes issue of Ordinary (Equity) Shares. Section 81 of the Companies Act, 1956 provides inter alia that whenever it is proposed to increase the subscribed Capital of a company by issue and allotment of further shares. Such further shares shall be offered to the persons who on the date of the offer are holders of the Ordinary Shares of the Company, in proportions o the capital paid up on that date unless the members in a general decide otherwise by way of a Special Resolution. The listing agreement executed by the company with various stock exchanges also contains similar provision in this regard. The securities issued pursuant to this resolution may be listed on stock Exchanges whether in India or abroad as decided by the Board. While no specific instrument has been identified at this stage that may be issued by the company pursuant to the resolution the ordinary(Equity) shares if any allotted on conversion of securities or exercise of warrants shall rank parapassu in all respect interse with the then existing ordinary equity shares of the company.

Your directors recommend the acceptance of the proposed resolution in the best interest of the company. None of the directors are interested or concerned in the business.

From the above issues, following conclusions can be drawn:-

(1) The MOA has not authorized to receive any money for preferred shares as on the date of execution of share subscription agreement as well as date of receipt of money.
(2) AOA also does not contain the amended authorized capital.

Therefore, the execution of the share subscription agreement on 11.5.2005 and receipt of money on 28.6.2005 was without any authority in the MOA and therefore ultra virus the MOA and beyond the authority of the company as well as Board of Directors in terms of Section 291 of the Act and such ultra virus act of MOA cannot be regularized by the general Body or by the directors.
The intimation relating to increase in authorized capital in form 5 was filled in the ROC office on 11.8.2005. As such, authorized capital is deemed to have been increased u/s 97 only on 11.8.2005. Therefore, till 11.8.2005, the company was not authorized to received any money on preference share capital.

Further, resolution No.4 & 5 relating to issue of preference shares u/s 81 and 81(1A) were not passed prior to the execution of share subscription agreement or the receipt of money and therefore execution of share subscription agreement on 11.5.2005 was beyond the competence of the Board of Directors.

(2) Voilation of Section 628 and 173 of the Act.

As stated in para 1 above , the company ahs passed resolution No.4 & 5 u/s 81 and 81(1A)of the Act for issue of preference shares. The perusal of the resolution as well as explanatory statement u/s 173 of the Act reveal that though they had entered into share subscription agreement on 11.5.2005 and para 2.1 and 2.2 of the agreement provides that company will issue and allot to investors, ie., Vmoksha, Mauritius and others to the extent of 8405520 redeemable preference shares of Rs.10/- each at a premium of Rs.65/-, the company has failed to give the full disclosure of (i) this material document (ii) the material facts that were already decided vide this agreement dated 11.5.2005 and (iii) pre-decided premium of Rs.65/- in the explanatory statement contained in the notice dated 20.6.2005. As the company omitted to disclose the said material document facts contained in the material document and the premium amount of Rs.65/- per share knowing it to be material, knowingly in the resolution as well as the explanatory statement in the notice dated 20.6.2005 to the EGM held on 20.7.2005, the company and the directors violated the provisions of section628 and 173 of the Act. A copy of the notice dated 20.6.2005 containing the said resolution as well as the explanatory statement is enclosed as Annexure… B

(3) Voilation of Section 372A(3) of the Act:-

As per the Balance Sheet. The Schedule "G" contained the item "Advances" for investment of shares in Vmoksha entities for Rs.65.03 crores. The perusal of the paper reveal that the said money was received in terms of share purchase agreement dated 11.5.2005 (one different from that of share subscription agreement referred above). Though the above advance was made on 30.6.2005, the company could not get any shares allotted.
From Vmoksha till date. Therefore, the said advance attract provisions of section 372A of the Act as loans and therefore it further attracts provisions of section 372A (3) of the Act. Explanation provided under the subsection 10(a) for share application money is specifically mentioned, this means that share application money included under "loans and advances" for relevant purpose for meaning provisions of section 372A of the Act. T. In the instant case, the company has clearly shown it as an 'advance' but could not get shares allotted for more than two years, it is definitely a 'loan'. As the shares were not allotted for more than 2years, because of different reasons, the shares now cannot be allotted against the said advance from the retrospective date of advance, i.e..30.6.2005, it attracts the provisions of sections 372A of the Act as loans without charging interest. As the company could not get any interest from the said advance, it has violated Section 372A (3) of the Act.

Anonymous said...

http://moneylife.in/CMS.nsf/AL3?OpenForm&Stocks~Investing~Helios%20&%20Matheson%20Under%20The%20Scanner

Sucheta Dalal
Money Life– Magazine - 10thApril 2008
Helios & Matheson under the Scanner

Sucheta Dalal reports on the bruising battle between H&M and Rajeev Sawhney

When the media writes about Helios & Matheson (H&M), it is only positive news .Nothing negative ever makes it to the newspapers. Yet, over the past two years, the company has caught in a bruising battle with Rajeev Sawhney, a US-based non resident Indian (NRI), co-founder of vMoksha, an IT company that was allegedly acquired by H&M.

On 12 March 2008, the Enforcement Directorate (ED) raided the Chennai headquarters of H&M. We learn that the raids were based on investigations by the Reserve Bank of India (RBI) that were forwarded to the ED in November 2007, in connection with foreign exchange violations in the vMoksha deal.

Meanwhile, the stock exchanges on which H&M is listed and the Securities and Exchange Board of India(SEBI) continue to remain silent, despite receiving the information as well as hundreds of documents sent by Rajeev Sawhney to them. Sawhney has also send the documents to RBI, Foreign Investment Promotion Board (FIPB), the Ministry of Corporate Affairs (MCA) and other regulatory agencies.

Rajeev Sawhney fights his battle by digging for information and then openly marking copies of the correspondence and new findings to every regulator in the country .The good news for India is that, unlike SEBI, the other government agencies have not ignored Sawhney's missives (most of them have also been marked to us and other journalists) and there has been several actions leading up to the raid by the ED.

The battle started a couple of years ago when H&M announced a $19 million buyout of vMoksha, co-founded by Rajeev Sawhney and Pawan Kumar( former CEO of the controversial DSQ Software), with the former putting in the money and the latter running the operations . Sawhney soon realised that he had been kept in the dark about many aspects of the deal.

For instance , he found that instead of receiving $19 million, a bank account had been 'fraudulently' opened in the State Bank of Mauritius in vMoksha's name and used to borrow US$ 13.5 million using a fake board sanction and false entries. That money was remitted to H&M ostensibly for subscription of redeemable preference shares on 28 June 2005. The regional director of the MCA conducted a technical scrutiny of H&M and found that the loan was, indeed, obtained by falsifying the board minutes and making false entries. Worse, the H&M chairman provided a personal guarantee for this borrowing by vMoksha even before acquiring the company or transferring any funds for its acquisition.

State Bank of Mauritius allegedly approved the loan , although the loan documents were unsigned and on plain sheets of paper instead of the company's letterhead.

On 30th June, the same funds were transferred back to vMoksha ostensibly as part of the acquisition amount and were used to pay back the dubious loan.

The regional director concluded that there had been a "diversion of funds between the two entities"; he also found problems with H&M's infusion of foreign capital under the guise of "foreign collaboration for software development" when in fact it is "only an investment for acquisition of vMoksha entities."

As things stand, the Vmoksha acquisition is part of an ongoing arbitration proceeding while investigations by various government agencies are independent of it. H&M has maintained a curious silence over all of Rajeev Sawhney's open allegations after having attempted to gag him couple of years ago. The media is completely silent and seems to blank out anything negative about H&M; the only action has share holders can witness is a pitched battle between H&M's mouthpiece and someone from the Sawhney camp on the moneycontrol.com message board. The irony is that money control and its associate CNBCTV 18 are silent on the issue.

From the investors' perspective, it is important to note that the share price, which was clearly being ramped up for a long while, is now quoting at Rs56.40, down from its 52-wek high of Rs188.85 in June last year.

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