MIRA INFORM REPORT

 

 

Report No. :

346691

Report Date :

26.10.2015

 

IDENTIFICATION DETAILS

 

Name :

ANAND RATHI FINANCIAL SERVICES LIMITED (w.e.f. 29.01.2008)

 

 

Formerly Known As :

ANAND RATHI SECURITIES LIMITED (w.e.f. 29.05.2006)

 

ANAND RATHI SECURITIES PRIVATE LIMITED

 

 

Registered Office :

4th Floor, Silver Metropolis, Jai Coach Compound, Opposite Bimbisar Nagar, Goregaon (East), Mumbai – 400063, Maharashtra

Tel. No.:

91-22-40013700

 

 

Country :

India

 

 

Financials (as on) :

31.03.2014

 

 

Date of Incorporation :

07.06.1996

 

 

Com. Reg. No.:

11-100108

 

 

Capital Investment / Paid-up Capital :

Rs.229.747 Million

 

 

CIN No.:

[Company Identification No.]

U67120MH1996PLC100108

 

 

IEC No.:

Not Available

 

 

TAN No.:

[Tax Deduction & Collection Account No.]

MUMA11743E

 

 

PAN No.:

[Permanent Account No.]

AABCA3577G

 

 

Legal Form :

A Closely Held Public Limited Liability Company

 

 

Line of Business :

Services provider of financial services.

 

 

No. of Employees :

200  (Approximately)

 

 

RATING & COMMENTS

 

MIRA’s Rating :

B (33)

 

RATING

STATUS

PROPOSED CREDIT LINE

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

Small

 

Status :

Moderate

 

 

Payment Behaviour :

Slow but correct

 

 

Litigation :

Clear 

 

 

Comments :

Subject is a well-known company incorporated in the year 1996. It is India one of the leading financial service provider.

 

The rating draws strength from the established track record of the Company in the commodity broking business, experienced promoters in the financial sector and its strong risk management.

 

The rating is, however, constrained by significant fall in the brokerage income and the group's alleged involvement in NSEL and the ongoing Economic Offence Wing (EOW) probe and volatility in commodity broking business.

 

The company has reported almost stable revenue base however, increased in total expenses has resulted in losses in the year under consideration.

 

Trade relations are fair. Business is active. Payment terms are reported to be slow but correct.

 

In view of strong brand recognition of the company in financial service industry however with losses the company can be considered for business dealings with some caution

 

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

 

 

EXTERNAL AGENCY RATING

 

Rating Agency Name

Not Available

Rating

Not Available

Rating Explanation

Not Available

Date

Not Available

 

 

RBI DEFAULTERS’ LIST STATUS

 

Subject’s name is not enlisted as a defaulter in the publicly available RBI Defaulters’ list.

 

 

EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS

 

Subject’s name is not enlisted as a defaulter in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of 31-03-2015.

 

 

INFORMATION PARTED BY (GENERAL DETAILS)

 

Name :

Ms. Komal Karwa

Designation :

Deputy Manager

Contact No.:

91-22-40013700

Date :

23.10.2015

 

 

LOCATIONS

 

Registered Office :

4th Floor, Silver Metropolis, Jai Coach Compound, Opposite Bimbisar Nagar, Goregaon (East), Mumbai – 400063, Maharashtra, India

Tel. No.:

91-22-40013700

Fax No.:

91-22-40013770

E-Mail :

dhavalashar@rathi.com

 

 

Corporate Office :

11th Floor, Times Tower Kamala City, Senapati Bapat Marg, Lower Parel, Mumbai-400013, Maharashtra, India

Tel. No.:

91-22-40477000

Fax No.:

91-22-40477070

 

 

DIRECTORS

 

AS ON 30.09.2014

 

Name :

Mr. Amit Anand Rathi

Designation :

Managing director

Address :

284 - 15, Kalpataru Horizon, S.K. Ahire Marg, Worli, Mumbai - 400018, Maharashtra, India

Date of Birth/Age :

07.10.1974

Qualification:

C.A. and M.B.A

Date of Appointment :

13.01.1998

DIN No.:

00029791

 

 

Name :

Mr. Pradeep Kumar Gupta

Designation :

Managing director

Address :

37A, Yashodham, Film City Road, Goregaon, (East), Mumbai - 400063, Maharashtra, India

Date of Birth/Age :

20.07.1967

Qualification:       

B.Com

Date of Appointment :

13.01.1998

DIN No.:

00040117

 

 

Name :

Mr. Anand Nandkishore Rathi

Designation :

Whole-time director

Address :

274 -014, Kalpataru Horizon, S.K. Ahire Marg, Worli, Mumbai - 400018, Maharashtra, India

Date of Birth/Age :

25.06.1946

Qualification:       

B.Com and C.A.

Date of Appointment :

01.04.2002

DIN No.:

00112853

Pan No.:

AADPR6532R

 

 

Name :

Mr. Charan Das Arha

Designation :

Director

Address :

QTR 4, IAS QTR, Kundanbagh Begum Pet, Hyderabad - 500016, Telangana, India

Date of Birth/Age :

02.07.1945

Date of Appointment :

03.06.2008

DIN No.:

02226619

 

 

KEY EXECUTIVES

 

Name :

Mr. Dhaval Girish Ashar

Designation :

Secretary

Address :

B-201, Kent Residency, Off. Eksar Road, Borivali (West), Mumbai - 400092, Maharashtra, India

Date of Birth/Age :

23.08.1980

Date of Appointment :

13.03.2012

PAN No:

AJOPA3622K

 

 

Name :

Ms. Komal Karwa

Designation :

Deputy Manager

 

 

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

 

AS ON 30.09.2014

 

SHAREHOLDING DETAIL FILE ATTACHED

 

Equity Share Break up (Percentage of Total Equity)

 

AS ON 30.09.2014

 

Category

Percentage

Foreign holdings( Foreign institutional investor(s), Foreign companie(s) Foreign financial institution(s), Non-resident Indian(s) or Overseas Corporate bodies or Others

19.35

Bodies corporate

4.12

Directors or relatives of Directors

74.03

Other top fifty shareholders

2.50

Total

100.00

 

 

BUSINESS DETAILS

 

Line of Business :

Services provider of financial services.

 

 

Products :

Item Code No.

Product Description

99715122

Financing and Advisory Activities

 

 

Brand Names :

Not Available

 

 

Agencies Held :

Not Available

 

 

Exports :

Not Divulged

 

 

Imports :

Not Divulged

 

 

Terms :

 

Selling :

L/C, Cash and Credit

 

 

Purchasing :

L/C, Cash and Credit

 

PRODUCTION STATUS: NOT AVAILABLE

 

 

GENERAL INFORMATION

 

Suppliers :

Reference :

Not Divulged

Name of the Person :

Not Divulged

Contact No.:

Not Divulged

Since How Long Known :

Not Divulged

Maximum Limit Dealt :

Not Divulged

Experience :

Not Divulged

Remark:

Not Divulged

 

 

Customers :

Wholesalers, Retailers

 

Reference :

Not Divulged

Name of the Person :

Not Divulged

Contact No.:

Not Divulged

Since How Long Known :

Not Divulged

Maximum Limit Dealt :

Not Divulged

Experience :

Not Divulged

Remark:

Not Divulged

 

 

No. of Employees :

200 (Approximately)

 

 

Bankers :
  • Bank of India, Stock Exchange Branch, P.J. Tower, Dalal Street, Fort, Mumbai - 400001, Maharashtra, India

 

Banker Name

The Jammu And Kashmir Bank Limited

Branch Address

79A, Mehta House, Bombay Samachar Marg, Fort, Mumbai - 400001, Maharashtra, India

Person Name (With Designation)

Not Divulged

Contact Number

Not Divulged

Name of Account Holder

Not Divulged

Account Number

Not Divulged

Account Since (Date/Year of Account Opening)

Not Divulged

Average Balance Maintained (If Possible)

Not Divulged

Credit Facilities Enjoyed (If any)

Not Divulged

Account Operation

Not Divulged

Remarks (If any)

Not Divulged

 

 

Facilities :

(Rs. In Million)

SECURED LOAN

As on

31.03.2014

As on

31.03.2013

LONG TERM BORROWING

 

 

Loans taken for vehicles

(Hypothecated against Vehicle)

2.019

2.026

SHORT TERM BORROWING

 

 

Rupee term loans from banks

334.000

0.000

Total

336.019

2.026

 

Auditors :

 

Name :

Khimji Kunverji  and Company

Chartered Accountants

Address :

Suite 52, Bombay Mutual Building, Sir Phirozshah Mehta Road, Fort, Mumbai -

400001, Maharashtra, India

PAN N Income-tax PAN of auditor or auditor's firm :

AAAFK1142M

 

 

Memberships :

Not Available

 

 

Collaborators :

Not Available

 

 

Subsidiaries :
  • Anand Rathi Share and Stock Brokers Limited, India (ARSSBL)
  • U67120MH1991PLC064106]
  • Anand Rathi Commodities Limited, India (ARCL)

 [U67120MH1991PLC064107]

  • Anand Rathi Global Finance Limited, India (ARGFL)

 [U67190MH1982PLC140380]

  • Anand Rathi Insurance Brokers Limited, India (ARIBL)

 [U67120MH1992PLC066006]

  • A R Venture Funds Management Limited, India (ARVFML)

[U67120MH1995PLC086696]

  • AR Trustee Company Private Limited (ARTCPL)
  • Anand Rathi Advisors Limited, India (ARAL)

 [U17100MH1987PLC043579]

  • Anand Rathi IT Private Limited (ARITPL)
  • Anand Rathi Financial Services (HK) Limited

 

 

Others (Entities where KMP have control):
  • Gerard Viegas Finvest Private Limited (GVFPL)
  • Dynamic Orbits Advisory Private Limited (DOAPL)
  • Anand Rathi Marketing Services Private Limited (ARMSPL)
  • Nischal Enterprises Private Limited (NEPL)
  • Amit Capital and Securities Private Limited (ACSPL)
  • Asha Leasing and Finance Private Limited (ALFPL)
  • K B Productions Private Limited. (KBPPL)
  • Predict Investment and Finance Consultants Private Limited. (PIFCPL)
  • Anand Rathi Commodities International Private Limited (ARCIPL)
  • Elegant Capitals Private Limited. (ECPL)

 

 

CAPITAL STRUCTURE

 

AS ON 31.03.2014

 

Authorised Capital :

No. of Shares

Type

Value

Amount

 

 

 

 

25000000

Equity Shares

Rs.10/- each

Rs. 250.000 Million

150000000

Preference Shares

Re.1/- each

Rs. 150.000 Million

 

 

 

 

 

Total

 

Rs. 400.000 Million

 

Issued, Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

 

 

 

 

22974679

Equity Shares

Rs.10/- each

Rs. 229.747 Million

 

 

 

 

 

 

FINANCIAL DATA

[all figures are in Rupees Million]

 

 

ABRIDGED BALANCE SHEET

 

SOURCES OF FUNDS

31.03.2014

31.03.2013

31.03.2012

 

 

 

 

I.              EQUITY AND LIABILITIES

 

 

 

(1)Shareholders' Funds

 

 

 

(a) Share Capital

229.747

229.627

229.107

(b) Reserves & Surplus

1157.795

1197.220

1186.291

(c) Money received against share warrants

0.000

0.000

0.000

 

 

 

 

(2) Share Application money pending allotment

0.000

0.000

0.000

Total Shareholders’ Funds (1) + (2)

1387.542

1426.847

1415.398

 

 

 

 

(3) Non-Current Liabilities

 

 

 

(a) long-term borrowings

2.019

2.026

144.290

(b) Deferred tax liabilities (Net)

5.780

23.933

24.519

(c) Other long term liabilities

9.700

8.625

7.425

(d) long-term provisions

0.000

0.000

0.000

Total Non-current Liabilities (3)

17.499

34.584

176.234

 

 

 

 

(4) Current Liabilities

 

 

 

(a) Short term borrowings

495.067

355.031

148.107

(b) Trade payables

33.052

5.606

11.005

(c) Other current liabilities

39.555

105.796

39.464

(d) Short-term provisions

0.100

2.865

9.029

Total Current Liabilities (4)

567.774

469.298

207.605

 

 

 

 

TOTAL

1972.815

1930.729

1799.237

 

 

 

 

II.          ASSETS

 

 

 

(1) Non-current assets

 

 

 

(a) Fixed Assets

 

 

 

(i) Tangible assets

168.786

175.660

183.470

(ii) Intangible Assets

0.000

0.000

0.000

(iii) Capital work-in-progress

0.000

0.000

0.000

(iv) Intangible assets under development

0.000

0.000

0.000

(b) Non-current Investments

1635.479

1635.097

1445.597

(c) Deferred tax assets (net)

0.000

0.000

0.000

(d)  Long-term Loan and Advances

27.858

20.141

39.891

(e) Other Non-current assets

2.822

2.822

5.280

Total Non-Current Assets

1834.945

1833.720

1674.238

 

 

 

 

(2) Current assets

 

 

 

(a) Current investments

0.000

0.000

0.000

(b) Inventories

0.000

0.000

0.000

(c) Trade receivables

129.947

88.518

114.538

(d) Cash and cash equivalents

1.957

3.007

6.527

(e) Short-term loans and advances

5.755

5.368

3.934

(f) Other current assets

0.211

0.116

0.000

Total Current Assets

137.870

97.009

124.999

 

 

 

 

TOTAL

1972.815

1930.729

1799.237

 

 

 

PROFIT & LOSS ACCOUNT

 

 

PARTICULARS

31.03.2014

31.03.2013

31.03.2012

 

SALES

 

 

 

 

Income

330.637

330.882

294.762

 

Other Income

20.267

22.171

35.934

 

TOTAL (A)

350.904

353.053

330.696

 

 

 

 

 

Less

EXPENSES

 

 

 

 

Employees benefits expense

258.380

219.865

221.411

 

Other expenses

93.910

94.312

71.232

 

TOTAL (B)

352.290

314.177

292.643

 

 

 

 

 

Less

PROFIT/ (LOSS)  BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (C)

(1.386)

38.876

38.053

 

 

 

 

 

Less

FINANCIAL EXPENSES (D)

48.046

12.390

9.891

 

 

 

 

 

 

PROFIT / (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)

(49.432)

26.486

28.162

 

 

 

 

 

Less/ Add

DEPRECIATION/ AMORTISATION (F)

8.229

13.735

21.634

 

 

 

 

 

 

PROFIT/ (LOSS)  BEFORE TAX (E-F)   (G)

(57.661)

12.751

6.528

 

 

 

 

 

Less

TAX (H)

(18.236)

3.133

-1.531

 

 

 

 

 

 

PROFIT/ (LOSS)  AFTER TAX  (G-H)   (I)

(39.425)

9.618

8.059

 

 

 

 

 

 

Earnings / (Loss) Per Share (Rs.)

(1.72)

0.42

0.35

 

 

CURRENT MATURITIES OF LONG TERM DEBT DETAILS

 

Particulars

 

31.03.2014

31.03.2013

31.03.2012

Current Maturities of Long term debt

1.160

73.404

10.843

Cash generated from operations

NA

NA

NA

Net cash flows from (used in) operations

(88.381)

122.141

33.208

 

 

KEY RATIOS

 

PARTICULARS

 

 

31.03.2014

31.03.2013

31.03.2012

Net Profit Margin

(PAT / Sales)

(%)

(11.92)

2.91

2.73

 

 

 

 

 

Operating Profit Margin

(PBIDT/Sales)

(%)

(0.42)

11.75

12.91

 

 

 

 

 

Return on Total Assets

(PBT/Total Assets}

(%)

(17.09)

4.31

1.85

 

 

 

 

 

Return on Investment (ROI)

(PBT/Networth)

 

(0.04)

0.01

0.00

 

 

 

 

 

Debt Equity Ratio

(Total Debt /Networth)

 

0.36

0.30

0.21

 

 

 

 

 

Current Ratio

(Current Asset/Current Liability)

 

0.24

0.21

0.60

 

 

 

FINANCIAL ANALYSIS

[all figures are in Rupees Million]

 

DEBT EQUITY RATIO

 

Particular

31.03.2012

31.03.2013

31.03.2014

 

(Rs. In Million)

(Rs. In Million)

(Rs. In Million)

Share Capital

229.107

229.627

229.747

Reserves & Surplus

1186.291

1197.220

1157.795

Money received against share warrants

0.000

0.000

0.000

 Share Application money pending allotment

0.000

0.000

0.000

Net worth

1415.398

1426.847

1387.542

 

 

 

 

long-term borrowings

144.290

2.026

2.019

Short term borrowings

148.107

355.031

495.067

Current maturities of long-term debts

10.843

73.404

1.160

Total borrowings

303.240

430.461

498.246

Debt/Equity ratio

0.214

0.302

0.359

 

 

YEAR-ON-YEAR GROWTH

 

Year on Year Growth

31.03.2012

31.03.2013

31.03.2014

 

(Rs. In Million)

(Rs. In Million)

(Rs. In Million)

Sales

294.762

330.882

330.637

 

 

12.254

(0.074)

 

 

NET PROFIT MARGIN

 

Net Profit Margin

31.03.2012

31.03.2013

31.03.2014

 

(Rs. In Million)

(Rs. In Million)

(Rs. In Million)

Sales

294.762

330.882

330.637

Profit

8.059

9.618

(39.425)

 

2.73%

2.91%

(11.92%)

 

 

LOCAL AGENCY FURTHER INFORMATION

 

Sr. No.

Check list by info agents

Available in Report (Yes/No)

1

Year of establishment

Yes

2

Constitution of the entity -Incorporation details

Yes

3

Locality of the entity

Yes

4

Premises details

No

5

Buyer visit details

--

6

Contact numbers

Yes

7

Name of the person contacted

Yes

8

Designation of contact person

Yes

9

Promoter’s background

Yes

10

Date of Birth of Proprietor / Partners / Directors

Yes

11

Pan Card No. of Proprietor / Partners

Yes

12

Voter Id Card No. of Proprietor / Partners

No

13

Type of business

Yes

14

Line of Business

Yes

15

Export/import details (if applicable)

No

16

No. of employees

No

17

Details of sister concerns

Yes

18

Major suppliers

No

19

Major customers

No

20

Banking Details

Yes

21

Banking facility details

Yes

22

Conduct of the banking account

--

23

Financials, if provided

Yes

24

Capital in the business

Yes

25

Last accounts filed at ROC, if applicable

Yes

26

Turnover of firm for last three years

Yes

27

Reasons for variation <> 20%

--

28

Estimation for coming financial year

No

29

Profitability for last three years

Yes

30

Major shareholders, if available

Yes

31

External Agency Rating, if available

No

32

Litigations that the firm/promoter involved in

--

33

Market information

--

34

Payments terms

Yes

35

Negative Reporting by Auditors in the Annual Report

No

 

 

NOTE: Registered office of the company has been shifted from Shubham Centre, B-2, 5th Floor, Cardinal Gracious Road, Chakala, Andheri (East), Mumbai – 400099, Maharashtra, India to the present address w.e.f. 22.02.2010

 

UNSECURED LOAN

(Rs. In Million)

Particulars

As on

31.03.2014

As on

31.03.2013

SHORT TERM BORROWING

 

 

Intercorporate borrowings

161.067

355.031

Total

161.067

355.031

 

 

INDEX OF CHARGES

 

S.NO.

CHARGE ID

DATE OF CHARGE CREATION/MODIFICATION

CHARGE AMOUNT SECURED

CHARGE HOLDER

ADDRESS

SERVICE REQUEST NUMBER (SRN)

1

10118044

31/05/2014 *

989,600,000.00

BANK OF INDIA

STOCK EXCHANGE BRANCH, P. J. TOWERS,GROUND FLOOR,,
DALAL STREET, FORT,, MUMBAI, MAHARASHTRA - 40002
3, INDIA

C06797864

 

* Date of charge modification

 

FIXED ASSETS

 

Tangible assets

 

  • Buildings
  • Furniture and fixtures
  • Vehicles
  • Office equipment
  • Computer equipments
  • Other equipments

 

PRESS RELEASES

 

NSEL CASE: MUMBAI POLICE ARRESTS THREE TOP BROKERAGE EXECUTIVES

MARCH 04 2015

 

Amit Rathi of Anand Rathi Financial, C.P. Krishnan of Geofin Comtrade and Chintan Modi of India Infoline have been arrested, says police

 

Mumbai: The Economic Offences Wing (EOW) of Mumbai Police on Tuesday arrested three top executives from prominent commodities brokerages in connection with the Rs.55743.400 Million fraud at the National Spot Exchange Limited (NSEL), extending its crackdown beyond NSEL officials, directors and defaulters.

 

The arrested executives were identified as Amit Rathi, managing director of Anand Rathi Financial Services Limited; C.P. Krishnan, wholetime director of Geofin Comtrade Limited; and Chintan Modi, vice-president of India Infoline Commodities Limited.

 

The arrests were announced by Rajvardhan Sinha, additional commissioner of police (EOW). The three executives, arrested on charges of cheating, forgery, criminal conspiracy and misappropriation, will be produced before a court on Wednesday for being remanded to police custody.

 

EOW has now arrested a total of 24 suspects in connection with the fraud at NSEL, which emerged in July 2013 as a payments crisis. Rathi, Krishnan and Modi are the first people arrested outside the circle of NSEL executives, directors or defaulters who owe money to the commodities spot exchange.

 

Girish Dev, managing director of Geofin Comtrade, declined to comment.

 

India Infoline Commodities said its officials had been cooperating with the police in their investigation in the NSEL case and provided the documents, and clarifications sought by the police.

 

“While our utmost cooperation continues in the investigation, at the same time we are taking all necessary legal remedies, to protect the interest of the organisation, our clients and the employees,” it said. “We would like to once again clarify that India Infoline Commodities Limited acted only as a broker for facilitating the execution of orders by the clients on NSEL platform and we did not have any proprietary position or funding positions towards NSEL contracts.”

 

“Anand Rathi Commodities Limited and its directors, officials have fully cooperated with the agencies in the course of the investigations. We have submitted the requisite information/ documents as requested from time to time and clearly established that ARCL did not make any illegal profits/enrichment. We are disappointed at the turn of events and do not believe the arrest is appropriate in the circumstances,” Anand Rathi Commodities said in a statement.

 

“Our counsels approached the Hon’ble Bombay High court to prevent any arrest late afternoon today. The Court was pleased to grant an order directing no arrest of officials till March 4, 2015, if not already arrested. On submission of the order we were informed that the arrest has already taken place,” the statement added.

 

Additional commissioner Sinha said the three executives had been “evasive” and “non-cooperative” during the course of the investigation, prompting EOW to seek their custodial interrogation.

 

He added that the investigations found that the brokers gave “false assurances” to investors of NSEL along with “wrong and misleading statements” to entice the investors to trade on the spot exchange.

 

The EOW probe also found that the brokers assured investors that NSEL was a safe investment avenue with fixed returns and that it was regulated by the commodities market regulator Forward Markets Commission (FMC).

 

“Brokers also told investors that the exchange has adequate settlement guarantee fund (SGF),” said Sinha.

 

Every exchange has to maintain an SGF that is used to fulfil settlement obligations in the event of a default. Soon after news of the fraud broke, it was revealed that the exchange had made false claims related to the SGF balance and it did not have enough funds to honour all outstanding contracts.

 

NSEL is 99.99% owned by Financial Technologies (India) Limited, which has been directed by the EOW to inform it before liquidating any of the company assets.

 

The fraud at NSEL came to light on 31 July 2013, when the exchange suspended trading in all but its e-series contracts. These, too, were suspended a week later. The suspension may have been prompted by an instruction from the ministry of consumer affairs to the exchange asking it not to offer futures contracts. A spot exchange isn’t supposed to do so, but NSEL was doing it.

 

NSEL tried to implement the change, but because its appeal was to investors and members who were not interested in spot trades, it eventually had to suspend all trading.

 

It later emerged that all trading on NSEL happened in paired contracts, with investors, through brokers, buying a spot contract and selling a futures one for the same commodity.

 

The entities selling on spot and buying futures were planters or processors and members of the exchange. It turned out there were only 24 of them, and they used the paired contracts as a way to raise easy money.

 

Subsequent investigations highlighted the involvement of promoters.

 

On 14 August 2013, NSEL proposed a payout plan, but it has been unable to stick to the schedule and has not made a single successful payout.

 

According to EOW, 139 brokers traded on the NSEL. As per the police probe, Anand Rathi Financial has a total clientele of 12,900 and had conducted trades worth Rs.191302.000 Million on NSEL since the exchange became operational in 2008.

 

IIFL’s exposure was Rs.191834.800 Million and Geofin Comtrade’s Rs.55266.600 Million.

 

Apart from instances of false assurances, the police also found examples of circular trading, short selling and proprietary trading by brokers who even traded through client accounts without proper approvals.

 

“In one such case, trades worth Rs.10610.000 Million were done using a particular client account without his consent,” said Sinha.

 

Investor groups representing entities who have lost money in the scam have repeatedly demanded the arrests of brokers, alleging that they acted in connivance with the exchange.

 

“This action by the EOW was long overdue. All the brokers guilty in the NSEL scam should be punished,” said Ketan Shah, president, NSEL Investors’ Action Group.

 

The EOW probe has also found instances of conflict of interest between brokers and the exchange. In some cases, the contact details of certain employees of brokerages were listed on the NSEL website, said Sinha.

 

As part of their attempts to capture a larger market share, brokers also engaged in client code modification and extended loans to their employees and their relatives to trade on NSEL, he added. Client code modification helps brokers to move a particular trade from one client account to another.

 

Sinha added that the probe against brokers would continue as it has also revealed certain fictitious transactions between brokers and investors that raised suspicions related to illegal gratification.

 

NSEL SCAM: BROKERS OF IIFL, ANAND RATHI, GEOJIT ARRESTED

MARCH 3, 2015

 

Brokers were manipulating client codes to the tune of 3,00,000 times, after the trade was carried out on the exchange and then they transferred the same to other names

 

Three senior officials of commodity brokerages IIFL, Anand Rathi and Geojit Comtrade were today arrested in connection with the Rs 56000.000 Million National Spot Exchange scam.


City police's Economic Offences Wing tightened the noose on commodity brokers by arresting Anand Rathi Commodities Managing Director Amit Rathi, India InfoLine Commodities vice president Chintan Modi and Kochi-based Geojit Comtrade's whole time director C P Krishnan for their alleged involvement in the scam, EOW sources said.


The three commodity brokerages could not be immediately reached for comments.


The NSEL scam had come to light after the government had on July 31, 2013, ordered the Jignesh Shah-promoted spot exchange to stop trading in some instruments which led to a payment crisis. Following this, the exchange was forced to suspend trading and eventually down shutters, leaving over 11,000 investors in the lurch.


Police have been probing the role of brokers in the scam for sometime now.


Police sources said some other executives of Anand Rathi, Motilal Oswal, Geojit Comtrade and IIFL were already questioned by the EOW.


According to NSEL data, brokers were manipulating client codes to the tune of 3,00,000 times, after the trade was carried out on the exchange and then they transferred the same to other names.


It may be noted that in equities and commodities, changes in client codes are allowed only in a genuine case. But in this case, changes in client code were effected to transfer profit and loss to launder money.


According to market sources, as many as 200 brokers are alleged to have sold NSEL products as investment vehicles by promising an assured return.


After the exchange was shut down and the agencies began to probe the roles of the management and the brokers, the then newly formed NSEL Investors Forum had been demanding an investigation into the role of the brokers.

Following the crisis, many senior officials of NSEL, which is fully owned by the Jignesh Shah-promoted Financial Technologies, including Shah, were arrested.

After his arrest in May 2014 and bail in August, Shah, who founded Financial Technologies, stepped down from his position of managing director and chief executive.


As the probe into the case got widened, the regulators declared that Shah was not fit to hold more than 2 per cent stake in any of the over half-a-dozen exchanges he set up and was ordered to merge NSEL with his commex MCX.

 

CMT REPORT (Corruption, Money Laundering & Terrorism]

 

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

 

1]         INFORMATION ON DESIGNATED PARTY

No exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

 

2]         Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

 

3]         Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

 

4]         Record on Financial Crime :

            Charges or conviction registered against subject:                                                                       None

 

5]         Records on Violation of Anti-Corruption Laws :

            Charges or investigation registered against subject:                                                        None

 

6]         Records on Int’l Anti-Money Laundering Laws/Standards :

            Charges or investigation registered against subject:                                                        None

 

7]         Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

 

8]         Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

 

9]         Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

 

10]        Press Report :

            No press reports / filings exists on the subject.

 

CORPORATE GOVERNANCE

 

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

 

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

 

 

CONTRAVENTION

 

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

 

 

FOREIGN EXCHANGE RATES

 

Currency

 
Unit

Indian Rupees

US Dollar

1

Rs.64.88

UK Pound

1

Rs.99.89

Euro

1

Rs.72.06

 

 

INFORMATION DETAILS

 

Information Gathered by :

DIP

 

 

Analysis Done by :

KIN

 

 

Report Prepared by :

KVT

 

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

4

PAID-UP CAPITAL

1~10

3

OPERATING SCALE

1~10

4

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

4

--PROFITABILITY

1~10

3

--LIQUIDITY

1~10

3

--LEVERAGE

1~10

4

--RESERVES

1~10

4

--CREDIT LINES

1~10

4

--MARGINS

-5~5

--

DEMERIT POINTS

 

 

--BANK CHARGES

YES/NO

YES

--LITIGATION

YES/NO

NO

--OTHER ADVERSE INFORMATION

YES/NO

NO

MERIT POINTS

 

 

--SOLE DISTRIBUTORSHIP

YES/NO

NO

--EXPORT ACTIVITIES

YES/NO

NO

--AFFILIATION

YES/NO

YES

--LISTED

YES/NO

NO

--OTHER MERIT FACTORS

YES/NO

YES

DEFAULTER

 

 

--RBI

YES/NO

NO

--EPF

YES/NO

NO

TOTAL

 

33

 

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

 

Financial condition (40%)            Ownership background (20%)                  Payment record (10%)

Credit history (10%)                   Market trend (10%)                                Operational size (10%)

 

 

RATING EXPLANATIONS

 

RATING

STATUS

 

 

PROPOSED CREDIT LINE

>86

Aaa

Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums

 

Unlimited

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

 

Large

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

 

Fairly Large

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

 

Satisfactory

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

 

Small

11-25

Ca

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

 

Limited with full security

<10

C

Absolute credit risk exists. Caution needed to be exercised

 

 

Credit not recommended

--

NB

                                       New Business

 

--

 

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.