Sai Info CMD ‘siphoned off Rs 40 cr’ before he went ‘missing’, say staff in plaint

Sunil Kakkad, Chairman and Managing Director, Sai Infosystems

BL :  Ahmadabad :Virendra Pandit :September 19, 2013

With a Satyam-like saga slowly unfolding in Gujarat’s top IT company 

Sai Infosystems (India) Ltd, senior officials of the Rs 2,000-crore firm 

have complained to the Ahmedabad Police’s Crime Branch that 

Sunil Kakkad, Chairman and Managing Director, 

had allegedly siphoned off nearly Rs 40 crore 

in 12 days just before he went “missing” on June 28, 2013, along with his family.

Amit Mathur, Associate Vice-President, and Sangeet Nigam, Senior Vice- President, in a written 14-page complaint accompanied by 56 documents, charged Kakkad, his brother and director Sameer Kakkad, Prem Behl, also a director, and Baageshree Bhupen Savani, Senior Manager and PA to CMD of wrongdoings. Mathur personally handed over the complaint to the Joint Commissioner of Police, Crime Branch, on September 10.

The officials and employees, many of whom had quit but could not find work due to the current market conditions, finally met V.K. Saxena, President of an NGO, National Council for Civil Liberties, to take up cudgels on their behalf.

Fudging, fabricating accounts

The complaint, besides raising the issue of non-payment of salary to the 1,400 employees of Sai Infosystems, accused these persons and Mihir Jitendra Patel, Personal Finance Consultant, in collusion with their auditors, of “fudging” and creating fabricated accounts by reflecting a “very rosy” picture of the company. On this basis, they managed to procure contracts from the Governments of Maharashtra, Gujarat and Madhya Pradesh.

According to the complainants, the audited balance sheets for the last two fiscal years were “manipulated” to reflect huge profits and to “defraud the employees, bankers, creditors, vendors and government-owned companies”.

Crores transferred

Between June 14 and 24, that is, just before “absconding” on June 28, Kakkad “transferred” approximately Rs 27.83 crore, from Sai Info account with State Bank of India, Ahmedabad, to his various group companies, Mathur and Nigam alleged, while furnishing the list of the amounts transferred. These amounts were transferred to the firms named Tanya, Swan, Power Info, Cameo, and Blue Eye.

Further, Kakkad, on June 26, also transferred Rs 10 crore from his another group company, Click Telecom Pvt Ltd, to a third group company Power Info, and Rs 2 crore from the account of his another group company Atrium InfoComm Pvt Ltd, to Power Info-Control & Services Pvt Ltd. Copies of transfer advice signed by Sunil Kakkad were attached with the complaint.

Besides, according to the complaint, Kakkad set up SIS Global (USA), INC, in Oak Brook, Illinois, SIS Global (FZE) in UAE and Kompac Technologies Ltd, Hong Kong.

Investments

The company’s balance sheet for the year ended March 31, 2013, showed that it had invested Rs 11.33 crore to purchase equity instruments, government securities and in mutual funds. It bought shares worth Rs 7.50 crore in Atrium Infocomm Pvt Ltd, Rs 1.41 crore in SIS Global(FZE), UAE and Rs 4.46 lakh in SIS Global (USA), Inc, all subsidiary companies of Kakkad .

Requesting the Crime Branch to register a criminal case under various sections, Mathur and Nigam have said the bank accounts of the subsidiary companies, too, be frozen. They have also sent copies of the complaint to the Chief Minister, CBI, Income Tax and Provident Fund departments.

SBI notice in dailies

Earlier, SBI had, in a public notice published in various dailies said: “The CMD of SIS Group… Shri Sunil S. Kakkad, is not contactable and is reported to be missing.” SBI, which heads a consortium of banks that have, according to sources, lent Rs 1,000-1,200 crore to SIS, warned people against dealing with the assets of SIS and its associate companies.

The SBI notice mentioned the assets of two companies, including immovable properties charged/mortgaged to the consortium as security for the various credit facilities granted. The firms were: Click Telecom Pvt Ltd (associate of SIS), with its registered office at Nariman Point, Mumbai, and Attrium Infocomm Pvt Ltd (a subsidiary of SIS), with its office at Bodakdev, Ahmedabad. Kakkad was a director in both these companies as on March 31, 2013.

Properties mortgaged

Kakkad and Sai Infosystems had reportedly mortgaged 14 properties, including eight in Gujarat, on which SBI has claimed first right. The securities charged to the banks included all the current assets owned by these two companies in Ahmedabad, Hyderabad, Bangalore, Kolkata, Cherthala and Parwanoo, all the receivables, plant and machinery and other fixed assets at these places, and immovable properties in Ahmedabad, Gandhinagar and other places.

Founded in 1992 by Kakkad, an electronics and communications engineer and a first generation entrepreneur, Sai Info had emerged as one of the fastest growing end-to-end ICT solutions providers and system integrators. It had also diversified into hardware manufacturing, software development and telecom services. SIS had, in the last couple of years launched, in a tie-up with BSNL, a video calling facility from PCOs, said to be India’s first “see phone”.

The company’s revenues had zoomed four times to Rs 1,500 crore in 2010-11 from Rs 350 crore in 2006-07. It was allegedly facing financial crunch since August 2012 despite having an order book of over Rs 2,500 crore.

The sudden ‘collapse’ of a seemingly robust company, whose hoardings asking the vehicle drivers to be careful, “Mobile Off, Seatbelts On,” can still be seen on the Ahmedabad-Gandhinagar Highway, had caught many by surprise.