Saturday, July 25, 2015

Mascon Global creditors become shareholders

Under the new RBI guidelines, commercial banks and financial institutions can takeover defaulting companies by converting their debt into equity (SDR = Strategic Debt Restructuring). Recently companies like Electrosteel Steels, Jyoti Structures Ltd, Monnet Ispat, and Visa Steel went through this process. Other companies like IVRCL and Lanco Infratech are said to be going through the SDR route. All of these companies are from industries that require heavy capital expenditure for a turnaround: steel, power, and infrastructure.

Turnaround and recovery of loans is much easier in the IT industry. In a company like Mascon Global, which has quietly hived-off profit making subsidiaries, that recovery should be still easier if the promoters are cooperative.

As of now, Mascon Global creditors have filed winding-up petitions at the Madras High Court. The registered office of Mascon Global in that city is now occupied by Quadrant 4. The company only exists on paper, and all their assets, personnel, money, and intellectual property has been fraudulently transferred to new companies. So these winding-up petitions have no chance of recovering the amounts due.

The list of Mascon Global creditors:

  1. SBI Global Factors in the amount 13,27,00,000 (13 crore and 27 lakh)
  2. State Bank of India in the amount 131,19,60,942 (131 crore and 19 lakh)
  3. ICICI Bank in the amount 56,28,97,500 (56 crore and 28 lakh)
  4. Deutsche Trustee Company in the amount $64 million
  5. L&T Finance in the amount 70,15,64,124 (70 crore and 15 lakh)
  6. Oriental Bank of Commerce in the amount 15 crore

Corrections and additions to this list are welcome.

As against these amounts there are the unaccounted funds hidden/transferred by Mascon Global from:

  1. the sale of MGL Solutions to Quadrant 4 for $19 million
  2. 4 million shares of Quadrant 4 Systems Corp listed on the NASDAQ, which legally belong to Mascon Global Ltd
  3. the transfer of Mascon Global assets to BT System and Service, which became Secure Earth by acquiring the listed entity Globsyn Infotech
  4. the funds in BT System and Service subsidiaries: RTTS and Gee Softech, which were holding Mascon Global properties in their name
  5. the fraudulent transfer of Mascon Life Sciences assets to Secure Earth Health And Life Technologies Limited and Secure Earth Advanced Systems Private Limited
  6. unaccounted money from the aborted acquisitions of SDG Corporation and Comtel Holdings Singapore
  7. the fraudulent transfer of Mascon Global subsidiary Ebusinessware (MGL FInance) into MediaAgility, AdGlobal360, and Ondemand Agility
  8. the fraudulent transfer of Mascon Global American subsidiaries into iDEA Solutions Inc.
  9. unaccounted money from the sale of iDEA Solutions Inc. to Xoriant corporation
  10. funds/property of InfoSage Systems which was merged into Mascon Global in 2008 but now functions independently


The only way for creditors to get their hands on these funds and companies is to become owners of Mascon Global by converting their debt to equity.

Hari Chandra, as director of Secure Earth, shows his address at 92 New Cavendish Street in London, England, on the Ministry of Corporate Affairs website. He has been sued by Calliope Capital Corporation (Laurus Master Fund) which used to be a US creditor of Mascon Global. From PDFServer, we learn:
On November 10, 2014, this Court entered judgment in favor of Plaintiff and Judgment-Creditor Calliope Capital Corporation ("Calliope" or "Plaintiff") and against Defendant and Judgment-Debtor Hari Chandra ("Chandra" or "Defendant") in the amount of $1,383,549.93.

Calliope seeks the Court's assistance in obtaining post-judgment discovery relating to Chandra's assets. Since judgment was entered, Chandra has simply refused to comply with his discovery obligations. Chandra has failed to appear for a noticed deposition on three separate occasions.

Another case, Investec Bank vs Opalgem Investments Corp, involves K Chandra and his wife Lakshmi Chandra:
In March 2008, plaintiff extended to defendant Opalgem credit in the amount of $32 million, secured by a mortgage on Chandra's Manhattan condominium unit at 2000 Broadway. The loan is guaranteed by Chandra and two entities he owns and/or controls, Elite International Finance Limited and Rockmans Investment Incorporated.

Opalgem defaulted on the underlying obligation, and in December 2010, plaintiff commenced foreclosure proceedings on the unit, naming Chandra, Elite, and Rockmans as liable. On March 4, 2014, a judgment was entered in plaintiff's favor against the subpoenaed parties in the sum of $14,138,452.65, plus interest.
The address for Rockmans Investment Incorporated is shown as 26 Westway, Greenwich, Connecticut, which is also the address given by K Chandra to the Ministry of Corporate Affairs as a director of Secure Earth Advanced Systems Private Limited.

If creditors in India wish to avoid such tactics they need to takeover Mascon Global by converting debt to equity. There is some value to be had in the subsidiaries which are operating independently.

4 comments:

  1. Dear Author, our company is also a bondholder in Mascon. I would really appreciate if you could reach out to us by writing me a mail at ccm.capital@yahoo.com

    Many thanks.

    ReplyDelete
  2. Dear CCM Capital, you bondholders should join hands with banks and other creditors and takeover Mascon Global ltd.

    ReplyDelete
  3. This is an awesome post.Really very informative and creative contents. These concept is a good way to enhance the knowledge.I like it and help me to development very well.Thank you for this brief explanation and very nice information.Well, got a good knowledge.

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    ReplyDelete
  4. VERY GOOD POST WE SMALL SHAREHOLDERS CAN JOIN YOU BUT YOU HAVE TO TAKE A STEP AND TAKE OVER THE COMPANY WITH BANKS

    ReplyDelete