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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.
@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.
The price action could suggest that the PW issue possibly stands rejected, bearing in mind the 3 months deadline of issuance after receiving the shareholders’ approval.
In that event, the company is obliged to report to the Stock exchanges as well as inform the shareholders of the same, as well as the reasons for the denial.
If rejected, it may be difficult for BCG to undergo the same exercise again in the near future. Which then begs the question as to the availability of additional funds required for the growth of the business, as well as discharge and settlement of the pending Daum issue.
There is no update on the LOC, which is surprising, considering the ‘almost done’ proclamations by SKR on a number of occasions, and the confidence expressed by Rathi_b and team after their second visit to the BCG office in December 2020.
So, where do we stand today? And what bodes for the future of the company and its place in the market from an investor’s perspective?
The recent positive Analyst’s report factored in the receipt of funds from the Preferential Warrants, and the LOC was to be the ‘whenever required’ funds against receivables.
May I specifically request Logan and DH to offer their thinking on this ?
Or is it premature to sound doubtful and concerned at this particular point of time.
Well spoken @jay69. From time to time, one expresses his or her frustrations with this abominable attitude of SKR and his toothless board. No independent director worth his or her salt would be a silent spectator to the manoeuvrings on display of such brazen price manipulation and control, not to speak of countless missed timelines (so convincingly articulated by Mr Reddy to a ‘desperately seeking redemption’ audience of wanting to believe retailers) of various important milestones that could have lifted the company to an altogether different hemisphere of sought after new-age tech companies.
The shamelessness of it all and the complete lack of ethical responsibility toward the ‘trusting’ shareholder of a public listed company is truly mind- boggling.
But then, as I have stated before, we bleat but no avail.
We are toothless too, like the other board members, in this charade being played out- just puppets on a string being deftly jerked around by the one and only master puppeteer.
And then we talk of improvement in Corporate Governance in relation to BCG. I think that is an oxymoron.
Time and again we are led to believe that finally SKR and the management have taken to heart the complaints and criticism of their poor communication and dealings with the retail investors, and have decided to turn the clock on past pathetic handling of affairs including suspected manipulation of the stock price.
Alas, we are but pawns in the games being played, and left to deal with the emotional roller coaster rides we have experienced over the last many years.
So much for being a multinational company headquartered in India.
Mr Reddy’s advisory board needs to impart some lessons to him in the art of winning public trust and managing the company and its stakeholders in a professional and transparent manner.
Don’t be shy of rewarding the long standing retail shareholders Mr Reddy. That will only generate goodwill for you and the company if you truly want to be a global player.
sac6310, being debt-free means heading for lower circuit again. Just see the irony of this positive development.
Patience being tested all over again. If someone has a rational explanation or would like to speculate on the current price movement, I would really appreciate some comments.10+
As one of the ‘others’ addressed by you @hw_tw, my personal view is that this forum should remain strictly for BCG related posts. The entire momentum and knowledge sharing built up over the last many months should not be diluted in any manner as we have enough Brightcom related issues and opportunities to deal with here. The other members directly mentioned may have a differing viewpoint, but I would be surprised if anyone would wish to lose focus at this very critical point of time in terms of a new journey finally commencing for a stock and company in which we have reposed our faith for the last so many frustrating years.
Of course, if admin is so inclined, a completely different different site may be set up rather than another thread on this particular one.
I do understand, though, that you were suggesting leveraging on the very thorough approach adopted by the esteemed members named by you , and that they could be doing the same for other companies and stocks, which data may be beneficial for all of us in our investment horizon.
Thank you for providing the multiple sets of results of companies in the same field @ Logan.
We have spoken ad nauseam about BCG’s potential but the lack of ability of the management to truly get its act together in order to realise its true potential in this exciting field of ad tech. They have been painfully slow in resolving legacy issues, improving on corporate governance, obtaining funding deemed so necessary for growth, and in the bargain losing out completely in the fantastic growth that the digital advertising sector has seen, and which has been acknowledged by Mr Reddy in the last few conference calls.
If resolution of these issues is genuinely beyond the capability and capacity of this team of technocrats, would it not be better to just sell the company or the promoters’ holding to a stronger and more capable player, who can then at-least help in realising its potential?
That may, of course, result in an open offer being made to all retail shareholders by the new owners, but at least this constant struggle and gameplay would come to an end.
This may appear to be an anti management post, but it’s not meant to be, as I would truly like to see Mr Reddy continue to be at the helm of this multinational conglomerate that he has so assiduously built up over many years of hard and visionary work.
The next few weeks and months will be revealing for us all, as we await the shift from drama and subterfuge to transparency and growth which we have awaited for the last so many years.
In agreement with your line of thinking @jay69. Earlier too they had a one time settlement agreement with Axis Bank, and despite payment of various instalments by BCG, we know how that ended up. Axis and BCG would have to present a settlement agreement to NCLT on or before the next scheduled date of 2nd March(as of now). Or Axis would have to withdraw their case as petitioners. Not sure of the exact procedure to be followed.
@vgsatwork, in my opinion SKR is not required to intimate the shareholders or the stock exchange every time an instalment is paid to Axis Bank. He has already informed the shareholders on Saturday 20th February about the settlement ( 17 crore) arrived at, and the fact that 5 crore had been paid the week before, with two instalments of 6 crore each to be paid – one on Monday 22nd and the second shortly thereafter.
Let us see what is stated before the NCLT on 2nd March about the settlement of the case.5+
@sobha, debt free means no institutional or bank borrowing in the books. Daum liability is a separate matter altogether. Not settled yet. Will be, presumably, once funds come in. LOC or PW money. And then BCG gets back Lycos Inc. I think Mr Reddy referred to the usage of those funds. LOC primarily for business growth. PW funds for strategic acquisitions, or related matters. But initially the funds will not be mutually exclusive for one or the other.
@buffet, it wouldn’t surprise me if some shareholders are deliberately left out of the list of the selected lot who are invited to ask the questions and interact with SKR.
Call me a sceptic, but there have been numerous times when despite pressing that pesky digit with great alacrity, one’s turn doesn’t come to pose pertinent questions. Or the con call is wrapped up suddenly as too much time is taken up by random (planted?) callers on irrelevant issues. No disrespect meant but as we noted in the AGM, very few meaningful questions find their place in the discourse that is too short for a quarterly interaction with the management.
Hence, a comprehensive email with pertinent questions and queries as detailed in the preceding many posts would really be useful, provided the management chooses to address each and every matter that is causing so much distress to the retail shareholders.
@Logan, I was not asking for us to see the audited results. Just a verbal confirmation of what I have stated and requested for.
The holding company, which is the only publicly listed company , namely BCG , does not contribute to the consolidated profits; it only adds to the consolidated turnover. Yet, this is the only entity which provides statutorily audited results to the public and the shareholders.
The bulk of the turnover and almost the entire profits are provided by the various overseas subsidiaries of BCG.
Can the management confirm that the books of account and the results confirmed by our Board of Directors, of each and every subsidiary , are audited by their local auditors in compliance with the local laws and regulations prevailing in those countries?
And are the books of account of Online Media Solutions currently being audited annually by E&Y?7+
@Diana Horton, you are entitled to believe otherwise that the preferential allotment funds have mysteriously disappeared, or there is a greater story of mischief here. It’s possible that I am mistaken, but my understanding is that since the actual final amount due to Axis was not agreed upon after BCG had defaulted on the OTS, Axis managed to get a stay order on these funds.
But why quibble over this at this point. Maybe it is an orchestrated drama. Who knows? You are definitely better informed than me on BCG and its management. The floor is yours.5+
@Diana Horton, the amount raised by issue of shares on a preferential basis, was a little above Rs 33 crore.
This sum has been frozen by the NCLT on a plea by Axis Bank, that these funds cannot be utilised for any other business or activity of the company till such time as the Axis claim is settled.
I trust my information on this subject is accurate.7+