Wednesday, October 03, 2012
SEL Manufacturing Co Ltd: A loot by the Promoters??!!
I had earlier written about many such loots or exploitation of the shareholders' wealth by notorious promoters who cannot think beyond their interests. My write up on Prajay Engineers Syndicate Ltd, is still there on my SumanSpeaksPlus blog. These promoters takes loopholes of the laws and make merry with the shareholders' money.
Anyway, today, I am taking of another company, which it seems it guilty of the same. But before I begin let me clarify that in this company my clients have holdings, and hence I have vested interest in the company.
The company is doing well, but the shareholders are shown the door and are getting poorer everyday. Most of the profits are looted by the dishonest promoters gangs. Some of it is evident if we look at the FY12, balance sheet of the company where the remuneration of the directors have almost doubled while the shareholders are given the dirt. The company neither takes time to reply to e-mails nor otherwise. I do not know how such things are allowed under the full glare of the regulators like SEBI. Let us take a look some of the activities of the company during the last one year:
(i) The company had to take Car Loans, year after year...........Huh!! And that too shot up from Rs.3, 016, 870 in FY11 to Rs.4, 654, 022 in FY12. This is a ploy to cut on the tax front.
(ii) The Festival Expenses, shooting g up from Rs.898,783 in FY11 to Rs.9, 048, 045 in FY12, almost a 10 fold increase. What is this yaar.........did they invite a whole village.......Huh!! How can this increase so much in a year and that too at the cost of poor shareholders' wealth---who gave them this authority to mismanage the funds.
(ii) While most of the shareholders lost money, the Director`s Remuneration increased from Rs.15,994,667 to Rs.23, 762, 000, on yearly basis. Like many of those unscrupulous promoters/director, this company also did the same, as if it is their paternal property.
(iv) The company is again talking of raising funds to funds its limitless expansions. It says, the resolution has been passed unanimously, while the company have funds in the form of quoted and unquoted investments worth crores of rupees through which they can fund the expansions, instead of going for high interest rate loans, which is eating the profits.The question is: are they really taking loans or the "Hawala" money being shown as loans in the balance sheet? The SEBI needs to take note of the same. Why are promoters trying to keep the share price low, while going in for unlimited expansion plans? Why don't they reply to investors' grievances?
I think this company could be target for hostile take over, as the promoters' holding is very less and at the same time it is growing exponentially, at the cost of hapless small investors. What I mean to say is that, due to bad promoters the shareholders are suffering and is not getting benefits of the expansion of the company. Most of the profits accrued are looted by these unscrupulous, gangs. I urge the regulators to take some steps so that the interest of small investors are protected.