A Real Steal

Now, the company under liquidation with assets valued at just Rs 30 crore, is scouting for buyers. The official liquidator appointed by the Punjab and Haryana High Court is preparing to sell it. The money from the sale will go to the creditors.

Faced with the Rs 437 crore loan the company owes to banks, the official liquidator appointed by the Punjab and Haryana High Court sold everything of value in Altos8217; computer factory in Delhi8217;s Okhla Industrial Area and handed the premises back to the landlord, about two years ago. The sale of the firm8217;s assets has generated a mere Rs 20 lakh.

OVERREACHING ambition and wrong arithmetic hurried Altos8217; end. It relied on a crude equation: The company would ask customers to pay the entire amount for a computer in advance and then wait for up to eight weeks for delivery.

Meanwhile, it would order computer components from Taiwan and Singapore and get huge discounts for bulk orders. The PCs would be assembled in India and sold for Rs 25,000. It was a steal compared to Rs 35,000 in the grey market and Rs 60,000 from a branded PC like Compaq. PCL was flooded with orders, but it slipped on its delivery commitments.

There are still customers across India who had paid Pertech Computers for a machine. It8217;s hard to believe that Dadan Bhai, an agricultural engineer from IIT Kharagpur and one of the early stars of India8217;s IT boom, now spends most of his time either fighting cases filed by unpaid raw material suppliers, banks, customers or making rounds of hospitals. Last heard, he was admitted at Batra Hospital for a heart problem.

In the final analysis, Altos was pulled down by the weight of its own problems. Dadan Bhai could not keep his supply lines going, his diversifications didn8217;t work and there were questions raised about how a company that earned a net profit until 1995-96 suddenly reported a loss of Rs 366.12 crore the following year.

The company had also invested in building a software business called Mindware. That sank because it could not get business abroad. These investments in Mindware apparently eventually killed PCL.

DADAN Bhai8217;s other business venture were component assembly lines in Gurgaon for three US manufacturers. In a submission before the high court, he had said his firm crashed after Dell decided to source components from vendors closer to their plant. The lines catering to Dell orders became non-operative from April, 1996. Soon the orders from Seagate and Hewlett Packard stopped.

Meanwhile, when bankers saw Mindware sinking too, they refused to give any money for reviving the company. The result: Dadan Bhai failed to deliver thousands of PCs though he had collected advance payment for them. Mindware was also sold off, a part of it to a foreign bank and the rest pledged to the Exi Bank.

It was in 1998 that the company8217;s secured creditors moved the Calcutta High Court to recover their money. PCL on February 24, 1999, scurried to the BIFR asking to be declared itself a sick unit. But a year ago, the Punjab and Haryana High Court had already ordered the winding up of its parent company, Altos.