Tags:
Journalism of Courage
CHANDIGARH, Sept 5: Forestry companies have been making news over the past couple years … much of that news has been bad news for investors. Now, fear of losing their money keeps fresh investors away with the result that many companies have wound up or are on the verge of collapse.
Forestry companies made their appearance in and around the city in the `80s and grew rapidly, luring the public with the promise of high returns. An Income Tax raid on a still-running reputed forestry company in September, 1995, flashed the warning sign to investors who promptly made a run on the firms to retrieve their money. Many lost their jobs, many more lost their investments and many forestry companies folded.
Still, many companies continue in business … but just barely. Customers are complaining that the companies are overstocked with excuses but apparently very low on cash as they are not returning deposits.
However, when Newsline met directors of some companies they had a different story to tell: K.D. Sharma, managing director of Veerbhumi, a forestry company running for the past three years, denies receiving complaints from any depositor. He also says his company has got its rating done. However, no investors were to be seen at the office. The director attributes the trend to fear among the general public. He adds that the company has many projects in the pipeline and there is no threat of it closing down.
As far as delay in payments is concerned, Sharma said that it only happens when there is some deficiency from the investors side.
Rajiv Ranjan, a director of Swaranbhumi, claimed his company was running smoothly but when this reporter was waiting outside the office, he met an ordinary looking middle-aged couple who were in tears complaining of harassment and refusal to return their money. While they were whisked away by one of the directors, Ranjan still maintained that all was rosy and said that SEBI norms would helpstabilise the situation.
Major D.S. Sandhu of Sector 35, who had not invested in any forestry company says that they are fraud and one should never go in for them. According to Lt Col Amarjit Singh, general secretary of Chandigarh Okara Investors Forum, who had himself invested Rs 10 lakh in Okara Agro Industries, says that the company closed down without paying even one of the investors who have subsequently registered many cases against the company.
However he blames SEBI for not implementing strict guidelines. A Sector 21 resident A.P.Kapoor lost Rs 1.10 lakh he had invested. The company paid him the due amount by cheque but the cheque bounced and he has since filed a case in a Consumer Court. A.S. Oberoi of Sector 46 invested Rs 10,000 in a resort company but even after maturity, he has not been paid his money and a case is with the Consumer Court. S.K. Malhotra lost Rs 25,000 which he invested with SPG Group.
"I went to the office but found it locked," he says. Investors are not the only sufferers, even employees of many companies complain that they have not been paid their salaries. Naresh Kumar of Jalandhar, who was appointed "Advisor to the MD" in a now defunct forestry company, is still waiting for salary arrears which run into lakhs.
