[tanv151]

Just completed the web series on Harshad Mehta; was doing some reading online and came across this interesting incident. Longterm shareholders of Reliance making so much money was not a matter of luck but Dhirubhai’s hardwork in protecting their interest. I am sure it’s not very hard for SKR to find a Anand Jain to fix issues with BCG’s CMP, but has he see shown any signs of trying to find one???

MANU MANEK VS DHIRUBHAI AMBANI

In the early 1980s, Reliance Industries was booming. This was partly due to the consistent performance of the company, and partly due to the fact that Dhirubhai Ambani kept his shareholders’ best interests at heart.

According to Choksey, “Dhirubhai had an overwhelming feeling that if investors were not kept happy, he couldn’t get more money, and that would limit his growth. So he treated investors as family members.”

That is until the Cobra set his sights on Reliance.

The fearless Manu Manek had realised the magnitude of the profit that the bear cartel would be able to generate if they were able to implement the short-selling strategy successfully.

Thus they entered the market and started short-selling with a vengeance. Large quantities of Reliance shares were short-sold consistently to bring down the price. The bear cartel’s intention was to bring the flood the market with Reliance shares and increase the supply several-fold. They expected that the share price would tumble as a result. They sold the shares at a high price with the intention of buying it back again when the price fell. In this way, they planned to rake in the profits.

However as it turns out, the Cobra had underestimated Dhirubhai Ambani.

Ambani was not one to surrender to such an attack and let his company’s stock price crash. He deployed his lieutenant Anand Jain to lead the defence.

Anand Jain was able to turn the defensive position into a counter-attack, and along with his associates, he essentially went after the bear cartel.

To counter the selling pressure, Anand Jain and his associates started buying up the shares that Manu Manek and his associates were selling. The more the bear cartel sold, the more Anand Jain bought. In this way, he was able to regenerate the demand for Reliance shares in the market.

As a result of the continued buying pressure, the share price of Reliance started to rise again.

What was even more troubling for the bear cartel was the fact that much of the short positions that they had adopted were leveraged in nature. This means the short-sellers did not actually own the stocks. They had intended to buy the shares when the price fell.

Anand Jain and the bulls were now in a position to checkmate the bears. Amidst the intense buying pressure, they insisted that the bears deliver the actual shares.

The bears now had no other choice. Either they would have to buy back whatever shares were still available at the inflated price or wait a little longer and allow the price to rise even higher.

This standoff actually caused the Bombay Stock Exchange to close down for a few days.

After that, Manu Manek and the bear cartel waved the white flag of surrender and paid their dues to Anand Jain and Dhirubhai Ambani.

Thus the indomitable that is Reliance, continued its march towards glory.

[tanv151]

My opinion on Axis bank case and how SKR will want to handle it…

SKR has the history of not making any move that will make him look like he is in ‘NEED’ or in a ‘WEAK POSITION’. One can perceive this attitude as ‘Never give up’ or ‘egoistic’, depending his/her overall take on SKR’s way of managing BCG.

– Axis has hurt his plans (along with his ego Imo) by getting the PO funds blocked

– As a response (befitting in his mind), he is deliberately buying more time from the court to even file a counter to Axis’s petition. One can always file counter even when the settlement is worked upon, if the intention is to close the case soon

– In the meantime, he is trying to get the LOC secured, when that happens (I hope soon), this 30 odd crore rupees will not have much value as he will have enough funds through LOC to tackle both cash flow issues, Daum and getting his money back which he had lent to the company

– This will enable him to display ‘I don’t care’ attitude to Axis and hope they will make the first move towards settlement

– Bottom line the case will go on.. I will be positively surprised if SKR closes it (I hope he will)

Overall, securing LOC is more important then ever. I really hope this is done soon.

[tanv151]

@Logan, I think you posted a comment that I am unable to see now. Not sure if it’s an issue just for me.

First of all, apologies, if my post came across as I am questioning you. That was not the intention and may be I should be mentioned that on my post. As mentioned in my previous posts, I am not here to challenge (let alone attacking) anyone’s view and as you rightly pointed out, everyone is entitled to have their own opinion and it’s not necessary that we have to agree with everyone. I am more than happy to ‘agree to disagree’ and do it in a polite way. I clearly understand only CEO has answer to those questions, so there is no point challenging anyone here.

I am just trying to share some observations through this forum, with fellow investors who have been part of this journey for long enough and hoping these questions will reach BCG management, as this forum has being playing a critical role here. Going by admin’s post, I get a sense that many would have thought my message and those questions were directed to you, my bad, I should have provided better clarity.

I repeat SKR is neither a friend nor a foe of mine, and I will continue to appreciate him for any good work and question things, wherever necessary.

@Logan and others who may felt I was challenging Logan or asking those questions to him, apologies for any inconvenience caused. It is important we all stay together in this journey and provide timely feedback to BCG management to protect interest of all the shareholders.

[tanv151]

With all due respect I beg to differ on the importance of Daum and Axis. Daum and Axis may not look big when compared to revenue and profits published by the firm. However, I strongly believe market is judging SKR’s INTEGRITY, TRANSPARENCY, DECISION MAKING and COMMITMENT towards shareholder by the way he has been handling Daum and Axis issues.

– Court granted receivership of Lycos to Daum; the order also said (from what I recollect) if Daum cannot recover all the money that is due to them form Lycos they can attach other entities as well. Pls correct me if I am wrong?

– In any case, if BCG already gave away Lycos, why is this still open. Why SKR is not saying we gave you Lycos and the matter is done?

– If he sees value in getting Lycos back (but he admitted Lycos is not what it used to be and we have made use of it already) why delay it?

– If the assumption is right wrt making use of 120 crore for business, why was not used in the past for growing top and bottom line? How many opportunities were lost by showing/keeping this amount in reserve?

– If the assumption about 120 crore is right, what is stopping SKR from communicating it?

– What was the need to dilute the equity base by issuing pref shares when he clearly knew he is going for LOC? May be 10 crore out of 120 crore could have been used to repay Axis last year? Have we seen any urgency from SKR in trying to close this loan? What value did he see in raising funds through PO when he knew there is a good chance of getting money through LOC process and work was underway?

– Why the whole PO issue was delayed? Remember the letter was signed by SKR in Dec but the ballot process started only towards the end of Jan?

– What process was used to identify the parties to issue the Pref shares to? Many say ex BCC director is associated with Muskaan Ltd, I couldn’t get this verified but if it’s true, is this a case of ‘I know what you did last summer, so better give my share’? I hope not

Having said all this, SKR is still in a very good position to fix all issues and make BCG a great company both in business world and stock market. He just needs to get a better sense of protecting shareholder’s interest through transparent and timely actions. Eagerly waiting to see that day.

[tanv151]

@admin – no worries.. @sateanna I am hoping we will get a positive response from IR for the f2f meeting, if that happens, can I request you to consider asking the questions that I have raised, pls?

I really hope BCG management and IR will mend their ways of dealing with share holders and will give us a positive & prompt response.

[tanv151]

@sateanna thanks for your support and efforts. Others, thanks for seeing value in meeting the promoter F2F. SKR is neither a friend nor a foe, I am always try to view my investment in a practical way. Any good work done by SKR (in this case) will be appreciated and anything that is not taken care of in a timely & transparent manner, will be questioned.

I like all the questions that have come up so far, especially @buffet.
Below are my questions:

1 – SKR had confirmed raising complaint on share price manipulation. Can we see details of complaints raised with SEBI or other regulatory bodies for investigating share price manipulation?
2 – Can we see the Audited reports of all international subsidiaries?
3 – Can we see the details of Income Tax dues and dispute with the authority?
4 – Break up of employees based on each entity? Where did we add 153 people between Feb 10th through May 13th.
Feb 10th Newspaper interview says 350 employee globally

https://www.thehindubusinessline.com/info-tech/brightcom-group-goes-for-organisational-restructuring-to-help-streamline-fund-flows/article30781685.ece

May 13th investor presentation shows 453 employees
https://www.bseindia.com/xml-data/corpfiling/AttachHis/58ac3aba-2ecd-4c58-80b6-0c1ca61ae0d4.pdf

5 – Why is BCG paying PF for only 21 employees under ‘Lycos Internet Ltd’ in India? Why did it reduce from 29?
Under which entity rest of the employees are covered?
6 – Did OAK completely exit the BCG on Aug 31st? Can we see any document that can confirm this?
7 – Outcome of the recently concluded Investor meet? How many investors were met with?
8 – Any action taken on the back of recent mandate on multicap funds?
9 – Where do we stand on ML and AI business initiative? How much more time we need to see revenue from this initiative?

@admin I have emailed the above questions with required details to the email mentioned by you. It would be great if these could be included as well.

[tanv151]

@admin I am sorry if I have missed the bus, hope not. I have a few questions and would love to join sateanna and others. let me know

[tanv151]

Unfortunately this is completely opposite to the statements made by SKR on the Conf call. Clearly, Axis bank has rejected the proposal made by SKR, due to which BCG has requested for more time.

Does this mean we need to be prepared for another long drawn court case?? I hope not. But all the progress so far point towards that and Axis has a better leverage in this case as they have been able to get the PO funds blocked through court order. BCG has already lost about 75 lakh rupees worth notional interest (calculated at @6% p.a provided by some bank on savings bank account). The longer this remains outstanding more the cost of opportunities
lost.

[tanv151]

Thank you @sateanna!

[tanv151]

@sateanna I thought so too.. I don’t live in Hyderabad but I am more than happy to travel if that will help the cause. I am with you on the feasibility due to pandemic, however, I hear some businesses are opening up. Since you live there can we check (if not too much of a trouble) if BCG’s workforce and SKR have started coming to office? So we can fix a date.

Anyone else who thinks this is a good option and wants to join?

[tanv151]

In continuation to my previous post #8492 (page 93 of this thread) I wanted to get some guidance from the knowledgable investors here about the options available to us (if any), which will help us protect our interest (hard earned money).

By no means I am trying to create panic situation here, I would be a fool to do it as I am still invested in BCG. I have mentioned in my earlier posts that I am confident of BCG’s value as firm and SKR’s way to treating us is my one and only concern. The way he is operating makes me feel he is even ignoring the existence of shareholders or operating like owner of a privately owned business where no one can question him or he is not answerable to anyone.

I wish to see SKR stick to his commitments, be transparent and proactively communicate with the investor community. I remember on one of the Conf calls he made a commitment of publishing the dividend policy within 7 days, and HE DID IT.

Unfortunately, there are not many instances like that for me to quote.
We have seen more misses than hits when it comes to SKR sticking to his words.
So, I am trying to see what options we have which enable us to work with the management, especially SKR to ensure issues get fixed in a timely manner and shareholder’s interest is given adequate priority.

1 – Continue to remain patience and hope SKR will mend his ways? For how long?
2 – Complain to the regulatory bodies? If my memory serves me right, one of the investors claimed he raised a complaint long ago but we haven’t seen any action/impact
3 – Meet SKR as a group (in person) to raise issues and verify details that he has been open to disclose if we meet in person? This option was discussed early this year but people who were inclined towards this step were requested to give SKR some more time to fix things. Is it a good step to take now?

[tanv151]

@JRS Peshwa Acharya’s appointment date is effective Sept 15th. So I doubt it has anything to do with NCLT Hearing on Axis.

[tanv151]

@kmr003 you raise some good points and trust me in each of those topics you have listed SKR was well aware of what’s happening. He is too smart not to know the required details. All the events are designed to be delayed for reasons that are beneficial for promoters and close associates.

What if the whole LOC thing is just a trick? Do we have anything to prove except for the announcements he has made through the exchanges? He can always say things didn’t work so we are looking at another option, which needs sometime (according to his standards at least two years).

Let me try to support my above statement with some examples

11th Nov, 2017 – As part of a media release doc, he announced BCG met with the state IT minister and confirmed their participation in the Blockchain initiative. Below is the link. But we never received any updates

https://www.bseindia.com/xml-data/corpfiling/CorpAttachment/2017/11/1eb47e6f-ff62-491c-bdff-3bb65eeb654f.pdf

10th Apr, 2018 – An announcement was made through the exchanges about engaging E&Y as the internal auditor, as a step to onboard them as the statutary auditors at a consolidated level. This made perfect sense as they were/are auditing sizeable portion of the group already. This process went on for months and on one of the calls he asked why so much delay, so our man responded “nothing wrong with E&Y, the delay is due to our business or how we operate”. But never received any updates again, and this was never talked about. Let alone informing the investor community about the reason why this was never finished. Below is the link:

https://www.bseindia.com/xml-data/corpfiling/CorpAttachment/2017/11/1eb47e6f-ff62-491c-bdff-3bb65eeb654f.pdf

31st July, 2018 – BoD meeting was held and the board approved raising 60 crore rupees by doing rights issue. Did anyone hear anything about this or the reason for not doing it? NO. Below is link:

https://www.bseindia.com/xml-data/corpfiling/CorpAttachment/2017/11/1eb47e6f-ff62-491c-bdff-3bb65eeb654f.pdf

Here is an extract from the edited transcript of the March quarter-

“Then coming to Lycos and Daum settlement. We were — in January, we had a settlement agreement ready to sign. We were to pay the first payment in January. And there was a challenge in terms of giving — handing off a cashier check and taking a signed agreement. And that’s where it stopped. Unfortunately, due to all the things, we couldn’t go to Korea, they couldn’t come to India, all these things kind of in a standstill state. And so that is where it is.” And all of a sudden on the June quarter call we hear that he has put this on hold.

[tanv151]

@JRS rightly said. SKR & Vijay K did a great thing by acquiring companies like OMS which are driving the revenues and growth. These entities have able leadership team to look after the business and expansion and all that SKR has to do is take care of outstanding issues. Unfortunately he is failing to meet market or investors’ expectations with false commitments.

I still believe BCG has great value and I am still invested. Just that I am frustrated with the way SKR is handling issues and communication.

[tanv151]

@lycos.rags.to.riches I may agree with Loc details being kept as a secret but I am struggling understand why Daum settlement being put on hold was not disclosed until the conf call?

Why Axis loan closure progress is not updated?

Why no updates on the analyst meet?

When questioned about reaching out to the mutual funds on the back of recent mandate by SEBI on multicap funds, he responded to the person in a way that it’s a no brainer, but no updates yet?

G group may not be attending the calls but I feel they have resources everywhere, including MMb.

I am not trying to challenge anyone’s views but merely putting across my point of view. I strongly feel SKR should stop this selective and secretive communication style. Provide regular or timely updates to investor community.

[tanv151]

And we are still waiting to hear from SKR on the below. Focusing on business shouldn’t mean he doesn’t keep the investor community informed. I am not sure about everyone but sure most of the investors are frustrated with his selective and secretive communication style.

1 – Axis loan – it’s been more than a week and some people are mocking the reason he provided for they delay. Can they be blamed? May be, but person who gave this chance should be blamed too.

2 – Can the company not provide some updates on the recently concluded analyst meet?

3 – We all agreed SKR took a conservative approach when he mentioned 4 months time for securing LOC, but what’s the realistic timeframe?

[tanv151]

This is my personal view of what’s happening with this scrip.

The gang is very powerful and opportunist. They first showed up on SHP around the time when one of the US entities filed bankruptcy. Ever since they have been increasing their stakes every quarter. Every single time we saw some momentum in the share price, the gang did the trick of bulk trade, only to create panic and increase the supply indirectly. They did by simply moving their shares between accounts.

They kept grabbing shares sold by big and small investors, including Everest’s shares. I strongly believe even shares that were sold by Oak are grabbed by the same gang. It will not show directly on their name immediately; this quarter they will show it against the name of ‘clearing agents’ and then eventually will be moved to their accounts.

Below are questions that arise on the back of these things:

1 – If you were the CEO of a company and someone or a firm is trying increase their stakes continuously to even surpass even CEO’s stake, would you at least not try to understand the rational?

2 – If they are showing so much interest (if genuine) why didn’t we offer the PO to them? Coz they definitely have money with interest in the scrip?

3 – Why not questioning constant movement of shares from one account to another and most importantly the timing of this move? When questioned on one of the calls, SKR simply said they are allowed to do it and he can’t do much. He showed no interest, why?

[tanv151]

@lycos.rags.to.riches in my view, SKR making announcement on new BOD only after he officially joined was fine as this was a surprise step that no one had expected. Having said that, on the ongoing issues all of us have been waiting to hear from the company and honestly they need to provide timely updates. Axis accepting the proposal or not doesn’t matter when it comes to communication. They need to be giving timely updates. Unfortunately, we are again at the mercy of NCLT website to get updates on Axis loan closure unless we hear something from the company later in the day. SKR needs to understand that he is the captain of this ship and take all the decision that is in the best interest of the company but do it in a way that is appreciated by all the investors by proving updates on the decisions, without waiting for the quarterly conf call. Example Daum being put on hold is absolutely fine by me as he knows the business best from his position but I would have appreciated him communicating to the investor community earlier on change of plan.

[tanv151]

@lycos.rags.to.riches understood. Do you think they can at least give the number of analysts/firms they met/made presentations to? This will prove the efforts made by the company and could play a part in the journey of restoring lost credibility. I guess they can, as SKR was able to mentioned the number of analysts who were on the conf call. I strongly feel BCG should make use of every opportunity big/small to communicate more with the market and shareholders. After all, communication has been one of the key concerns and they need to continue to work on this along with closure of outstanding issues.

[tanv151]

Today is the last day of Virtual Analyst meet that was scheduled between Sep 14 – 17. I hope the outcome is positive this time. In any case, I believe the company should give some updates irrespective of the results, unlike last time where we never heard anything. Fingers crossed…

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