Re. Polo Hotels Ltd. Open Offer Your order dated June 3, 2019 and
As stated in my letter dated 30th July 2019 the perennial defaulters –DAHIYA have till now not deposited Rs.11.95 Crs. in the escrow account as per SEBI order dated June 3, 2019.
To enforce the regulation on a defiant promoter who has been dodging the law for 2 decades, and to protect the investors and mitigate their suffering, SEBI will have to think of out of box solutions.
I very strongly urge you to please take immediate steps in a two pronged strategy.
A. Investor protection
B. Enforcing the Regulation on the rogue acquirer.
Investor protection
Investors have been suffering for the last 20 years. Please complete the Open Offer out of huge accumulation in the IPEF. This will be the right use of the funds collected in the name of Investor protection. I am not able to recollect any significant use of the funds collected for investor protection, apart from some paltry amount spent on advertisement and seminars. In case the funds are not used for the right purpose, the Government of India has already declared its intentions of asking the funds to be deposited with them.
Enforcing the Regulation on the rogue acquirer.
Please examine all the powers and provisions that you have to enforce your order of June 3, 2019.
Individual Net worth of 3 acquirers as given in the Draft Letter of Offer is as follows:
a) Mr. Amardeep Singh Dahiya --Rs. 1,172.95 /- lakhs only.
b) Mr. Abhey Ram Dahiya Rs. 2,585.29/- lakhs only.
c) Mr. Pankaj Dahiya Rs. 78.89/- lakhs only.
Thus the combined Net worth of the defaulting Acquirers is Rs. 3835.89 Lakhs. If they are not depositing and complying with your orders, it is a case of sheering defiance. You may think of obtaining a decree on these assets or taking a possession of these assets in the same way as banks are now doing to realise their funds. In my earlier letter I have already given you the detailed process that you may like to follow.
1. It will not be out of place to mention here that as per the Regulation 22 & 23 of SAST 1997, the Acquirers are not entitled to sit on the Board of the company till such time they have completed the offer or deposited 100% of the amount in an Escrow account.
2. Immediately remove DAHIYA and their nominees from the management of the company. As you are aware, the hotel business is that of cash sales which can be easily manipulated. I had personally stayed in the hotel for 3 days and observed the activities and interviewed various employees. The hotel is doing well and my guess estimate is that not even 10% of the revenue is being reported in the books. This is a major source of regular income for the promoter family who is not bothered about their bank a/c being frozen.
3. As provided in Regulation 44 (a) appoint a merchant banker for selling share of the defaulting acquirer
4. As provided in Regulation 44 (d) Freeze the voting or other rights on these shares.( You have already frozen the DP account.)
5. Expedite prosecution proceedings against Mr. Abhey Ram Dahiya, Mr. Amardeep Dahiya and Mr. Pankaj Dahiya.
6. The company has not held its AGM for the last 2 years.
I may once again appeal to you to not to hold the funds lying in the IPEF a/c too close to your chest. Please use it for the purpose it was instituted and pay to the investors who have been suffering for 20 years, else the government has already shown its intention of taking over all such funds from you.
Shall be obliged to hear from you and for your immediate action
As stated in my letter dated 30th July 2019 the perennial defaulters –DAHIYA have till now not deposited Rs.11.95 Crs. in the escrow account as per SEBI order dated June 3, 2019.
To enforce the regulation on a defiant promoter who has been dodging the law for 2 decades, and to protect the investors and mitigate their suffering, SEBI will have to think of out of box solutions.
I very strongly urge you to please take immediate steps in a two pronged strategy.
A. Investor protection
B. Enforcing the Regulation on the rogue acquirer.
Investor protection
Investors have been suffering for the last 20 years. Please complete the Open Offer out of huge accumulation in the IPEF. This will be the right use of the funds collected in the name of Investor protection. I am not able to recollect any significant use of the funds collected for investor protection, apart from some paltry amount spent on advertisement and seminars. In case the funds are not used for the right purpose, the Government of India has already declared its intentions of asking the funds to be deposited with them.
Enforcing the Regulation on the rogue acquirer.
Please examine all the powers and provisions that you have to enforce your order of June 3, 2019.
Individual Net worth of 3 acquirers as given in the Draft Letter of Offer is as follows:
a) Mr. Amardeep Singh Dahiya --Rs. 1,172.95 /- lakhs only.
b) Mr. Abhey Ram Dahiya Rs. 2,585.29/- lakhs only.
c) Mr. Pankaj Dahiya Rs. 78.89/- lakhs only.
Thus the combined Net worth of the defaulting Acquirers is Rs. 3835.89 Lakhs. If they are not depositing and complying with your orders, it is a case of sheering defiance. You may think of obtaining a decree on these assets or taking a possession of these assets in the same way as banks are now doing to realise their funds. In my earlier letter I have already given you the detailed process that you may like to follow.
1. It will not be out of place to mention here that as per the Regulation 22 & 23 of SAST 1997, the Acquirers are not entitled to sit on the Board of the company till such time they have completed the offer or deposited 100% of the amount in an Escrow account.
2. Immediately remove DAHIYA and their nominees from the management of the company. As you are aware, the hotel business is that of cash sales which can be easily manipulated. I had personally stayed in the hotel for 3 days and observed the activities and interviewed various employees. The hotel is doing well and my guess estimate is that not even 10% of the revenue is being reported in the books. This is a major source of regular income for the promoter family who is not bothered about their bank a/c being frozen.
3. As provided in Regulation 44 (a) appoint a merchant banker for selling share of the defaulting acquirer
4. As provided in Regulation 44 (d) Freeze the voting or other rights on these shares.( You have already frozen the DP account.)
5. Expedite prosecution proceedings against Mr. Abhey Ram Dahiya, Mr. Amardeep Dahiya and Mr. Pankaj Dahiya.
6. The company has not held its AGM for the last 2 years.
I may once again appeal to you to not to hold the funds lying in the IPEF a/c too close to your chest. Please use it for the purpose it was instituted and pay to the investors who have been suffering for 20 years, else the government has already shown its intention of taking over all such funds from you.
Shall be obliged to hear from you and for your immediate action
