[Srd.rdx]

BCG mgmt should provide an update on current status. There is too much of suspense over it.

[drjaysee]

Dear Srd.rdx (#11414), I had gone through Morepen Lab Board of Directors Approval letter to Exchange dated today 25.03.2021. But I don’t think this is the approval from Exchange. This process have already been done by BCG dated 28 Dec 2020 and this letter exactly identical as today’s Morpen Lab Board of Directors Approval intimation to Exchange. Personally, I haven’t seen any PW approval letter by Exchange to any companies so far including recent Ducon Infratech. Pls refer the attached PW approval letters by the company to exchange (Board of Directors Approval letters of BCG dated 28 Dec 2020, Ducon; Morepen to Exchange. Please correct me if I am wrong or appreciate your suggestion / input in this regard (for me it looks all three are in same stage now).

Attachments:

1. Pref-Warrants_List_BCG.pdf
2. Morepen-Approval-Letter-to-Exchange_25Mar2021.pdf
3. Ducon-Infra_PW-intimation-to-Exchange_1-Feb-2021.pdf

[Srd.rdx]

Dear drjaysee, Seems like I jumped the gun looking at the notification. Just noticed Morepen has sent such email in October 2020 as well raising 421 crores and then another notification raising 70 crores. So seems like A+B. Its just another warrants.

Others..Please do share your thoughts.

[sandyc316]

@drjaysee What you have attached here is the duplicate share certificate notification for Morepen Labs. As per the notification, Morepen Labs has indeed approved the allotment of warrants upon receipt of 25% of issue price from the entities.

Please refer this

Also, interestingly, almost all of the companies notified the exchanges only once the warrants were allotted and not when they received a formal approval for the same from the exchanges. So we should expect the same i.e. a notification once the allotment has been done.

[drjaysee]

Dear sandyc316 (#11424), my apologies. It was by mistake. However, the initial PW of Morepen Lab for 11 Allottee for 16.85 Crs PW @rs25 (Pls refer the attached dated 13 Oct 2020). Whereas, the recent approval (as per your link) for only 10 Allottee of 3.5Crs PW@rs25 (they have removed 1 Allottee – Liquid Holdings Private Limited 13,35,00,000) ..that means there may be a chance of rejection of the previous one and latest one for 3.5 crores has been approved by Board of Directors and sent to Exchange. This process of 34Crs approval by Board of Directors of BCG has been done on 28 Dec 2020. Now we should come to know about the outcome of that 34Crs PW approval from Exchange. But, so far I didn’t see any PW approval / rejection letter /order by exchange to any companies. May be this is not mandatory to disclose to the public and only internal communication between Exchange and Firm. Until now we have no idea about the status (Either BCG received any feedback / approval / rejection from exchange).

Attachments:

1. PW_Morepen-Lab-13Oct-2020.pdf

[sandyc316]

@jay69 Think these are the steps (not sure and I could be wrong)
1) Board approves the proposal to allot warrants and passes a resolution in AGM
2) Exchanges approve the resolution
3) Once resolution is approved, the allottees need to transfer 25% of the money to the company so that the warrants can now be allotted to them. At which point the company notifies through exchanges. (Think this is where Morepen Labs is)
4) The allottees pay the remaining 75% and exercise their right to convert the warrants into shares at which point the company again notifies the exchanges

@drjaysee Is it possible that the last allottee i.e. Liquid Holdings Private Limited are not interested anymore in the warrants? Is it ok for an entity to not exactly go through with it as there’s no binding term? Or it could very well be that they may transfer the 25% in a few days time at which point Morepen Labs may notify the exchanges again.

[drjaysee]

Dear @sandyc316,

Regarding Morepen PW, I guess there could be some conflict with the allocation of huge qnty (13.35Crs) to single entity “Liquid Holdings Private Limited” whereas other 10 entities are sharing only 3.5Crs. I presume, Morepen would have received some feedback from Exchange to remove the Sl.No 11 or could be the reason as you mentioned.

Regarding general PW approval process, I have tried to look at any previous Approval order by Exchange to any of the company. So far I did not find any PW approval letter/order by exchange to company but I have seen company’s Board of Directors approval of PW to Exchange. I am not sure whether Exchange approval needs to be disclosed to public or no? I think this may be an internal communication between Exchange and relevant company about any feedback / Approval / rejection of PW, hence we (the shareholders) need not worry about exchange approval. (For example, the Morepen Lab shareholders did not know about anything on the existing PW of 11 allottee of about 16.85Crs PW and now Morepen Board have approved PW for only 10 allottee of about 3.5Crs PW & sent to Exchange). That means, Company’s Board of Director & shareholders approval for PW is more vital which has been done in BCG case and sent to Exchange on 28 Dec 2020. After that we don’t know anything about the feedback / Approval/rejection of PW from Exchange to BCG since its internal communication. Hopefully, everything should be fine with BCG’s PW approval otherwise BCG have to repeat the entire process again like Morepen Lab which is an tedious time consuming process. Fingers crossed.

[Srd.rdx]

I have another doubt over here. Can it be that it’s A + B kind of situation OR we are sure that’s out of the proposed allocation to A, B is the final allottment?

If it’s case that B is final allottment who have paid money after they were cleared by exchanges then my guess is in BCG our of 260 crores we will see appox 200 crores being cleared by exchanges. I am connecting it to BCGs coverage in ET where Mr SKR said 200 crores are coming.

[Srd.rdx]

approved the allotment of
3,50,00,000 (Three Crore Fifty Lakh) Fully Convertible Warrants (‘Warrants’) each
carrying a right to subscribe an equal no. of Equity Share of Rs. 2/- (Rupees Two Only)
each of the Company, for cash, at an issue price of Rs. 25/- (Rupees Twenty-Five Only)
(including premium of Rs. 23/-) per warrant, on preferential basis to the entities
belonging to the promoter group o f the Company (‘ Allottees’), upon receipt of 25% of issue price from the allottees in
accordance with the provisions of SEBI (Issue of Capital and Disclosure Requirements)
Regulations 2018:

************* Seems like its the case that only the ones for which exchanges approved and they got 25% they allotted.

****Below is the wordings of Ducon

We wish to inform you that the Members of the Allotment Committee at its meeting held today
i.e., Monday, 1st February, 2021, have approved the issuance and allotment of the following on
conversion of outstanding Unsecured Loan amount post receiving in-principal approval from
BSE Ltd. and National Stock Exchange of India Ltd

So in both the cases…its the FINAL allottment post approval and not the proposal.

Like other boarders explained. There seems to be internal communication between exchange and company and post receipt of funds/approval the allottment is done.

I expect final allotment of around 200 crores in BCG and not 260 crores as originally proposed.

[sac6310]

@diana Horton please don’t wait even for 4 days(31st days) . take action and share you your further findings about deeds of thes one man amry.

@rathi_b and hyd team, I still remember how much you guys were excited after meeting in dec and seems that LoC will be approved by xmas only Now we are 4 months from there..still zero progress and prices are back to PW.

Green market and debt free status too cann’t able to lift the prices which indicates clear case of manipulation happening.

All please raise your voice until it becomes too late. This one man army is taking all of us for granted. Time to show him our power else it would be very-2 late

[lycos.rags.to.riches]

By the way i assume BCG should have got back the 30 crores blocked by Axis, since the case is closed now.

[Fox@108]

Every investor when they enter a script understands it’s risk and reward ratio and so did we as investors of BCG. But it shouldn’t stop us from questioning or taking actions against the wrong doings by its own management.
We can’t be like the idiots in MC forum who simply keeps on criticizing the company neither can we be like few idiots in the telegram group who can’t even accept the genuine negative points of BCG.
As a long term investors it’s the duty to show both side of the coins and gather people to strengthen the retail investors issues in this script.

At present the scenario is very clear, ie the blatant manipulation in share price. True, no one can deny the company potential nor can we deny the risk of it going nowhere. And I think it’s high time we from this forum start taking action.
I personally don’t have enough knowledge on the legal matters but I’m sure there will be few from this group.
The best we can do now is all can individually sign a petition asking sebi to order an independent enquiry into the working of the management of BCG and mail the petition to an individual who has legal knowledge so that person can forward it to SEBI.

If say even 1000 investors also come forward it can give huge weightage. I’m from Assam and I’m ready to contribute in anyway to fight for the truth. Let everything come clear we can’t be in false hope of every year of BCG to turnaround.
Let their be an enquiry so that to know whether it’s subsidiaries and it’s numbers are actually true or inflated.
If company don’t want to consolidate it’s subsidiaries than we are in deep water. It’s standalone business is non operational almost and consolidated no’s are not audited. So even if warrants are approved and still no transperancy in governance, than the rally won’t be a healthy one (if there happens to be a rally)

The way it’s going the script is becoming ideal more for the swing traders than long term investors.

[anirudhreddy]

Dear Alfa, Many thanks for your post (very well written) in forum. The story is not different what you have stated and i agree with you on the Audit and Transperancy which is must for retailers since we have invested million of rupees into it. Corp Governance has been played like anything and ethics, governence, complaince has been put on hold for the needs of their own benefits all these years. You have raised very valid points which i as an individual and Group of investors attest and echo with it fully. Lets wait till 31st March to the max, we have a hardcore CA group, few MNC CS, and a Corporate Legal and compliance person available to guide us on the mandates mentioned. As per Rathi ji and our Hyderabad team we have been patiently waiting for next 1 or 2 weeks but 31st March will be set as deadline to initate the actions. Please e-mail me @ fighterphi754@gmail.com, i shall get in touch with you and get you added in our Core Hyderabad Group. We need people like you who are vocal and want action on ground. Please get in touch me with i will provide you further contact details and lets do it together.

[odysee]

@Alfa44, there was a clarification issued that all subsidiaries are independently audited by local auditors as taxes are paid and compliance with local regulations has to be met in their respective domains ( whichever country they are in). OMS in Israel is the only one audited by an international firm (EY).
However, audit reports if any are not available to us in India, as the requirements here are for Board certified results to be presented to the holding company ( BCG) auditors, who then provide audited results of the standalone company and comment on the consolidated results as certified by management. This is not a very satisfactory state of affairs, and that is why the proposal of consolidating 12 subsidiaries was perceived to be a welcome move. BDO Global did conduct a due diligence and audit for the previous financial year, as stated by Mr Reddy, but then not for the current year, as the consolidation proposal was put on hold last summer. On a question posed by one shareholder at the last conference call, SKR did say that that proposal may get revived, but no clear answer was forthcoming. Some explanation was given that the LOC was being sought against the receivables of that consolidated lot and Goldman Sachs was involved. But later, another group of lenders was considering providing the line of credit without the need for consolidation.
A question was further posed as to how that disparate lot of companies could provide satisfactory figures to this group of lenders without a common reputable auditor being engaged. No clear answer was forthcoming.
The only partial saving grace is ,that annually, the company provides the summarised results of each subsidiary for the last few years.
It’s also possible that the LOC was kept on hold by the potential lenders as they were waiting for BCG to be declared debt-free, as till such time as Axis was settled, BCG had been declared a defaulter and the account was an NPA.
Maybe, the scenario would be different going forward. But then, the expectations of all of us ( the retail shareholders) have usually been belied, and we experience disappointment time and again.

[anirudhreddy]

Some Action by Ministry of Corporate affairs today in probing malpractices by company Godfrey Phillips in manipulation. Good atleast Government agencies started getting more serious about such issues.

Attachments:

1. 

   IMG_20210326_170749_465.jpg
   

[Fox@108]

@Anirudhreddy: thank you for the response. I will be sending you a mail now. Thank you.

@Jay69: sorry if my words doesn’t go down with the forum but I can’t think of any other way of describing them. And yes you’re right if any steps will be taken than it will be the Hyderabad team but yes I have cleared my view that I’m ready to help in any way. And if the company has nothing to hide than no investigation can harm it’s valuation. In short term it might effect but for long term it will be more beneficial if everything is clean

@Odysee: Yes you said it on point. The point on how these group of subsidiaries could provide satisfactory figures to the group of lenders without a common reputable auditor.

That’s why consolidation of subsidiaries is essential. And the audited no.’s from the respective countries of the subsidiaries are not taken into confidence by the market or the lenders.
There has been a series of excuses coming from the management, during the concall after 2nd quarter. Skr had replied to a question. “..LOC will be done if not by this bank than some other…” (This point only indicates there was an issue) and this time he talked about golden Sachs and other lender.
Even after the visit of the group from Hyderabad team when it felt LOC is just round the corner but it’s being dragged.

The point of how these group of subsidiaries could provide satisfactory numbers without a common reputable auditor validates my view of why the figures needs to be enquired if management voluntarily not interested to consolidate the subsidiaries.

And also, it’s not what we retailers beleive that matters but what the market and the institutions perceive the company. And I beleive if numbers and price manipulation and all were not an issue for the market/institutions than the share price would not have been where it is.

@Logan: My believing or not will not take the share price anywhere. But whether the market, lenders and big institution buyers believe or no is the issue.
And like I said, if numbers, share price manipulation (intentionally) were not an issue (for the larger market) than I beleive a company like BCG would not be trading in this valuation. I think with the same numbers if management went for consolidation before expanding business the value unlock and confidence in the market would have been much bigger.

[odysee]

Thank you for your comments @Alfa44. But you will note that the consolidation at this point was not required for the second group of lenders, as the group was presenting consolidated accounts in any event. And the quantum of receivables is far higher for all subsidiaries combined ( if the LOC is granted on that basis) as opposed to 12 US subsidiaries being considered for consolidation. I presume the exercise was begun because Goldman Sachs was the first large institution that positively responded initially to a possible line of credit, and desired that all US subsidiaries be consolidated under one umbrella to enable easier review, audit and reporting.
That,for all of us, was very positive.
But then, if a new group of lenders emerged that did not require the very cumbersome and complicated exercise of a consolidated entity, and on better terms as explained by Mr Reddy, then achieving the objective of quick access to a funding arrangement took priority.
The individual subsidiaries are being regularly audited in any event, and the new group of lenders may have been satisfied with that.
In the larger context, it is of course desirable that the initial proposal of consolidation be revived at some stage as is the view of most on this forum.
The suggestion of the consolidation came from the management itself; not that the shareholders or investors asked for it and the management was reluctant.
Corporate governance certainly needs improvement, but casting doubt on the figures requires a bit of a stretch. The markets have not favoured the company for many reasons, mostly valid, but also because of very poor PR and communication skills vis-a-vis the investing community, and being slow to deal with pending issues.
We too are frustrated with the valuations, and hope that true value discovery takes place in the not too distant future.

[Diana Horton]

My Dear BCGians

If I recall from one of the conference calls way back from the year 2017, the promoter stated that his main part of day to day job was to constantly be in touch and was liasing with the then 4 big share holders. If I remember correctly, the promoter stated that, all will be well and be taken care off and a decent exit will be given to the PE investors!

Now, 4 years down the line, we all know what in reality has happened or infact was MADE TO HAPPEN to the so called LONG TERM Share holders….

This in itselves shows the character and nature of the CEO of the company and the attitude and responsibility which the CEO shoulders and demonstrates!

In the discussion that’s going on here are two issues. The discussions are getting muddled up between the Company and the CEO.

The Company in itselves is good. It’s a good company and with good business.The profits are audited and the numbers are true. THIS IS NOT THE ISSUE

The issue is the One Man Army. The nature, the character and the ATTITUDE and the GREEDY AND GREESY UGLY nature of the One Man Army.

So, kindly do not muddle up between the numbers of the company and shoot oneselves into one’s own foot. My advice if you ask me is to TARGET the person, who is playing up with this, rather.

I have written on many number of occasions, talking or having discussions with the one man will army, will not change anything.6 years, we have all seen.

The number of investors who have privately met the one man army over the period of years,I AM SURE, will give laudable certificate of the man – the one with the TWISTED TONGUE,who spells Lies, Nothing but Lies.Infact, I had an opportunity to meet up with this man way back in the year 2017, alongside of one another investor from Mumbai. The other investor pulled out then and there after the meet and I’m here writing paragraphs!

I reassure you,if you are thinking that, you can set up meeting, towards , knowing anything.., from.this OMEA(one man evil army),it’ll be an absolute waste of time. This OMEA,will SWEET TALK you and will assure you with full load and shit load of reassurances and promises, only to beat the STOCK the NEXT DAY,after you meet up with a smirky smile on his face.

So, my advice to you my friends is- do not shoot up the company- as the company or its earnings is not at fault.. Its the evil OMEA, who is the cause of all the core issues and if you can do anything , kindly do the same.

I shall be in touch with Anirudh , past March this year,if the reversal dosent happen, good once and for all, to hand over all my research details with evidence, which will be more than be sufficient to BRING THE OMEA DOWN.

……………DH

[hw_tw]

Btw, does BCG has to inform exchanges on receiving LoC…Especially when the LoC is received at the subsidiary…Is this mandatory as per SEBI…isn’t this a normal operation for a company like a bank loan or an OD account

[sandyc316]

@hw_tw Don’t think the company is required to inform exchanges about all such things that happen at a subsidiary level but the thing is that is what separates companies with good corporate governance from the bad ones. It is unfortunate that SKR would choose to do the bare minimum when full disclosure and complete clarity is the need of the hour.

[Author]

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