[Logan]

As someone pointed out in MMB, the total traded shares from Jan 25th till March 31 was some 10-12cr (rough estimate). In the SHP promoters holding has come down by 18cr shares. Even if we take till this Thursday the total traded shares won’t be more than 18crs.

All the shares traded from that period can’t be of promoters because we had the forensic audit news also because of which many people sold shares. Maybe the reduction is because of off market transfer or an error from the company’s side.

The company is no longer a micro or a smallcap and the management people have to take things seriously. Sometimes it seems like they have a careless attitude towards the market/shareholders.

[Brightspot]

Logon, when you have time please copy paste the content from morning context website. so we the details about the forensic audit and why it was initiated by sebi, thanks for your time

[vgsatwork]

Follow up to my earlier post #13816

As I had mentioned, the increase in total number of shares held by promoters by only about 3.9 lakh shares despite the 4 llp’s now being listed as promoters.

Latest share holding pattern raises more questions than providing the required clarity.

1. I do not see Vijay Kumar Kancharla’s share holding being classified as non promoter or public. In that case, what happened to his shareholding? Has he sold them in open market? If that is the case, where is the update to the exchange with respect to the sale of shares by promoter group? This would be an unforgivable lapse in terms of corporate governance. This could potentially damage all the good will that the company has earned in the last 1 year or so. The shortfall is not a small number. It is some 18 crore shares and given that the market price of the share was around 100 rupees or so. That’s 1800 crore – give or take few hundred crores. Sale of such magnitude not getting reported to the exchange would put the promoters in deep soup with the regulators.
2. An explanatory update should have been included by the company highlighting the changes and the background for the same. Absence of which makes this entire transaction a shady one.
3. Also, there is no indication as to when the purported sale of 18 crore shares took place as there have been a price sensitive update w.r.t forensic audit was announced to the exchanges by late February by the company and the last published SHP of the company was on 25th Jan before this update. So, purported sale is potentially an insider trading activity while there is a price sensitive information (forensic audit) was not updated to the shareholders, but was known to the management.

This very serious lapse from the company and I am changing my long term stand on this stock and going to liquidate my holding first thing Monday morning

[akkithegrt]

hello vgsatwork,

How can promoters sell shares when only 13 crores odd shares were traded in that period.18 crores shares cannot be sold in open market in that period right,if only 13 cr shares were traded.

[vgsatwork]

It could have been an off market transaction which would never get reported as sale in exchanges

[akkithegrt]

see from 2010 there have been some rules through off market as well,I think following should be noted-
1)If promoters have sold through off market they would need big investor to purchase it,we are talking about 18 crore shares .The big investors who are purchasing share worth say at 100 are about 1800 crore transactions. I don’t think this is possible.
2)Say in worst condition if promoters have done so,it is mandatory to inform exchanges.
3)It would have better for promoters to sell in open market as the shares would have been easily absorbed due to demand.

Off market is definitely ruled out..!

[odysee]

@vgsatwork, since you will be exiting the BCG stock on Monday, I presume you will be exiting this forum too.
We will miss your comments.

[pradeep]

My guess, instead the promoters have removed the individual shareholding from promoter group and holding the same in public category

[hw_tw]

Listing out some questions which are running in my mind over the weekend and the answers I am getting at this point of time

Q: Has the promoter REDUCED stake
A: Yes

Q: Has the promoter SOLD shares in open market
A: Yes and No basis different theories floating around …

When we look at whole 18 Crs shares this makes it impossible to sell them in open market where the total transacted shares itself is only around 12 Crs

When we look at stakes separately of each Individuals / HUFs and other firms it could be that some transactions might have happened in open market and some in other routes like Share swap, Offline transactions or just moving out some existing promoter as non-promoter

Q: Have they reduced stake from 22.4 to 18.47 as reported in Money control or it’s 19.74 to 18.47%

A: It is actually from 19.74 to 18.47% … note that the reduction from 22.4 to 19.74% is due to increase in total no. of shares because of new preferential shares issuance to some LLPs along with Mr. SS plus MediaMint

In total the reduction is 1.27% … this might be significant for some and not so for some

Q: Why is this not reported to exchanges before … Can SEBI take some serious action on it
A: Reporting has to be done indepently by the party who did it … It’s not the duty of SKR to report on behalf of other promoters

SKR has reported it directly or indirectly (whichever way we take it) on Apr 5th while updating LLPs acquisition and further inclusion as promoters

SEBI can put a penalty plus some fine basis the loss caused to investors … SEBI had penalised Redmond Investments before for not reporting their transactions

https://www.sebi.gov.in/enforcement/orders/feb-2020/adjudication-order-in-respect-of-redmond-investments-limited-in-the-matter-of-ybrant-digital-limited_45987.html

This also tells us that some of these Promoter group entities are totally not in control of SKR / VK and we can’t link their actions

In this case too they might put some penalties if proven that they have not reported it irrespective of whichever way the transactions are done

Q: Is this reduction in existing stake linked to their business … are the numbers going to be bad
A: Largely No … SKR published this new presentation at this point of time to address this concern and let people know that business is as usual… given that this reconfirmation of 500Cr FCF came after Q4 we can be rest assured that Q4 revenues is in-line

Q: Is this reduction linked to future earnings … are they expecting some drastic reduction
A: No, in that case why would they increase the stake back and bring in the LLPs as promoters

Q: Is this reduction in existing stake linked to FA … are they expecting some huge impact
A: Probably and partially No … As we can see above that business is not impacted and most importantly the reporting mechanism is not going to change in future that would impact topline and bottom line numbers

Also we need to recall Mr. SS’s full payment

Q: Why have they reduced existing stake first and increased it back with new stakes from LLPs … What was the need to do this Rejig
A: I guess this is the most important question everyone need to ask themselves and seek answer for

I might be totally wrong in this … My guess is that SKR has done it to protect the company from any HOSTILE TAKEOVER by any third parties acquiring these LLPs and other new LLPs as well or by any other route … Since the cash required for it is huge, SKR and few other promoters might have taken this option to part away with their existing stake and get some cash and use it to acquire these LLPs (I guess Satyamite mentioned this too)

Q: Is there a chance of increasing stake in future
A: Probably Yes … basis Satyamite’s logic it can go around 24%

The other option is to get into these fresh Preferential allottee LLPs assuming that they have enough funds left (atleast VK’s portion) to purchase this stake

Or include some of these large Individual Investors as promoters … We all know that Mr. Subrato Saha ex director holds significant stake both individually and through his firm … Given their friendship isn’t it simple enough for SKR to make him as promoter … Even if not done he is still as good as promoter holding his stake … Similarly there will be some more other investors like Mr. Peshwa Acharya’s family who can be included in promoter group

Or they could openly purchase from the market
———

Selectively picking up and linking some events like Stake reduction, FA etc; might not give us correct picture, especially ignoring other events like Significant stake increase back through LLPs, MR. SS’s investment, Business intact, Acquisitions intact, Numbers, FCF intact, Possibility of future Stake increase etc;

As small investors we might not get answers for some of these questions in future too and thus puts us as the most riskiest lot of investors … It is important that we listen to everyone’s point of view and try to ask more right questions and be open and take our investment decisions basis our individual risk appetite

Note that these questions are important and these answers are just my views at this point of time basis what I am reading / understanding at this point of time and subject to change as things unfold and I might end up not even expressing it over here

[vgsatwork]

Yes. I will stay away from this forum once I liquidate my position

[Brightspot]

In the list of institutional investors, happy to see INTERNATIONAL MONETARY FUND (IMF) also lol.i would expect some big investor like Shankar sharma invest in BCG thats why new investors presentation was prepared and published last week , nowadays its mandatory for companies to publish the presentation to retailers (via exchange) which was created to share with institutional investors as per new sebi rule..expect fireworks in BCG soon

[vgsatwork]

SHP between 25th Jan & 31st mar shows the reduction in the number of shareholders by these people who are part of the promoter group
1. SKR – Holding reduced by 8.37 crore shares. He had separately bought 4 LLP’s, but they are listed in the LLP name itself and hence the stake buy in LLP is included and 8.37 crore of his original share holding is gone
2. Vijay Kumar Kancharla – 5.82 Crore shares reduced
3. Redmond Investments – 3.09 Crore shares reduced.

There should have been 3 update/notice respectively from SKR, VKK and Redmond investments w.r.t to their share sale as per the insider trading & SAST regulations, but we haven’t seen any. So, we do not know the date/mode of sale and also the consideration for which it was sold.

This is my last post in this forum and I am signing off from this. Good luck to you all with your investments

[Brightspot]

New Delhi: Capital markets regulator Sebi has removed certain disclosure requirements for acquirers and promoters of companies. The Securities and Exchange Board of India (Sebi) has amended the takeover regulations because of the implementation of the System Driven Disclosures (SDD).

Under the new rule, certain disclosure obligations for the acquirers/ promoters on acquisition or disposal of shares aggregating to 5 per cent and any change of 2 per cent thereafter, annual shareholding d ..

Read more at:
https://economictimes.indiatimes.com/markets/stocks/news/sebi-drops-certain-disclosure-requirements-for-promoters-upon-share-acquisition/articleshow/85413833.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

[odysee]

Could have, should have..in all likelihood. Wonder what the underlying reasons could be for this twist in the tail. Or tale.
In the meanwhile, a lot of us have no option but to switch focus to the superlative performance of the company in the last few quarters, and the expected solid fourth quarter results. The investor presentation documents submitted to the exchanges last week provided more than a hint of continuing good growth and performance with the projected free cash generated figures being retained.
MediaMint acquisition closure, Audio tech acquisition, FA report, projections for 22-23 etc etc shall be keenly awaited.
The continuing investment interest shown by Institutional investors, both domestic and foreign, shall also be followed with great interest in the coming quarters.
The long standing retail investors on this forum have shown a lot of patience and resilience over the last many years despite many challenges, and, at times, episodes and events causing despair. I trust we can keep the faith.

[Logan]

Since early 2020 there’s an improvement in the way the company communicates but there were also few issues in that period. Last year’s delay in paying dividend, this year it’s with the delay in crediting bonus shares and now the SHP confusion. For some events we can understand that things will not be in their control like the FA, Axis case etc but at least they should inform on things that they have control of like bonus, SHP confusion etc.

They paid more than 250crs to banks, grew the business, acquired a good company like MediaMint but corporate governance issues will overshadow these important things. FPIs, MediaMint people, Mr.Shankar Sharma all have shares now and at least they should guide the management properly on these things. No matter how much ever good suggestions we give, most of the companies will not take small retail investors like us seriously.

(Copy pasting the morning context article in my mobile phone is hard and tiresome and I’ll share the article whenever I get time to use my PC)

[kiran]

Hi,

You are referring toa article for some time. plz share it sothat community members can appeciate on time .You can share name of magazine and month of publications sothat we can seek from them.

[radhutheoptimist]

Lot of confusion over SHP, CS resignation, CFO retirement, forensic audit… I don’t care if this company is going to do good business in future or not. At present company management didn’t come out with proper response. They have conveniently forgotten the fact that we the small time retailers were the first one to believe in their success. We the small time retails were holding the fort during difficult days. Later only all those Sankar Sharmas, fpi, fii and LLP came to their rescue. But the management seems to have forgotten all that and trying to keep the retail out of their success. That’s when it loses the respect from the retail. I had to cut down my 50% holding…. Ofcourse made unimaginable profit with a bitter taste at the end as I was forced to do and I didn’t want to do. Trust matters a lot.

[odysee]

I don’t think any retail investor is ‘forced’ to either buy, hold or sell a stock.
Whilst one can understand to some extent the frustration and consternation felt by shareholders as a result of some disclosure or non-disclosure by the management, it doesn’t merit a rejection of the business of the company and its performance or its perceived robust future prospects.
We invest in a stock purely based on the business prospects of the company , and that is the hard, cold reality. Corporate governance or deficiency thereof, wouldn’t usually trump the stellar business performance of the company.
A different perspective can also be considered as regards the rewarding of the long standing faithful retail shareholder. Two bonus issues within a short span of time resulting in more than doubling of the original holding is a very decent reward.
And we trust the best is yet to come, as we await multiple announcements by the company, followed by the inevitable conference call, where we can ask for complete clarity on many stated issues that have generated some concern in the retail investor community.

[JackSparrow13]

Thank you odysee for encouraging us to focus on the business, during this period.

My personal thought is that management wants price to fall now, perhaps to buy from scared retailers. For past few months, management often gets super active, when price falls – uploading ppts, clarifications etc (Remember the big clarification after the interview with ET?). I am actually interested to see how management comes out victorious from a trouble of their making. Otherwise SKR is pure crazy to sell shares after acquiring Mediamint (and close to buying Audio Company) and core business doing good. It would also be childish to run away selling shares to public at high prices (distribution), where he can easily stay at his company, and earn salary for decades, and also transition his next generation.

There is a demerger story by Joel Greenblat, when management tries to perceive a demerged company as bad intentionally to scare away people. This might be a similar strategy. Atleast from SKR, who does backdoor acquisition of LLPs to boost promoter share, simple tactics to increase promoter share (like buying from market, when few biggies will push it to upper limit) should not be expected.

-Badly biased, Sorry.

[Logan]

Last time when they announced bonus they had the CS, Mr.Manohar, who’d have handled these things properly but this time there’s no one. Like others have guessed maybe the bonus was declared to make FPIs and other people to pay their money faster and having to deal with extra shares may have taken longer this time and that too without the CS.

They are not ready to invest money in areas that improve corporate governance and investor relations. No one replies to our mails and we’ll have to wait till the conference call to talk to the management. Now the CEO is signing all the documents which are supposed to be signed by the CS and he has to handle bonus shares also. It’s not like they don’t have money to invest in these areas but they are careless. Replying to investors’ mail and addressing their concerns should never be neglected. We have raised this issue in almost every conference call and I stopped doing that because I don’t want to look like an idiot repeating that again and again and not getting any proper answer.

MediaMint people have BCG’s shares now and after the next acquistion, Audio Ad company people will get shares of the company and it’ll be embarrassing for them if the company continues to make these kind of mistakes (or are this careless).

When things are going well these things may not look important but in tough times these are what makes the difference and makes you stand out and as a result the market gives you a premium valuation. Look at turnaround companies like Tanla and other smaller companies, not just business but they have improved a lot in corporate governance and investor relations too and it is helping them in tough times.

[Author]

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