Milkman and CEO

More than 15 years after it began, Vatsa remains a mystery.

No one really knows much about the company, except, of course, that it duped hundreds. Most investors don8217;t know who the company8217;s promoters were, what were the businesses or if it had any subsidiaries. The bottomline 8212; they don8217;t know where the firm used their money.

And they are not the only ignorant ones.

A chartered accountant, who audited Vatsa accounts in 1995-96, says the company was promoted by the 8216;Vatsa family8217;. Who were the members of this family? He didn8217;t know.

An estate agent who clinched the deal for the 8216;registered office8217; in Thane, doesn8217;t know who were the people he was dealing with. Best of all, many company employees had no clue who their CEO was!

The Indian Express spoke to one such employee, Ram Khatri name changed, who worked on the second-floor office in Vatsa House for five months. He got paid only for one.

8216;8216;They paid me around Rs 7,000 for the first month. After that, whenever we approached them for the salary, they would avoid us. They would make us do night shifts also. Meanwhile, my immediate boss quit and we didn8217;t know who else to approach. Can you get me my money?8217;8217; he asks this reporter.

He8217;ll just have to get in the queue, because the list of people wanting back their dues from Vatsa is long. The Thane office8217;s landlord is still waiting for the company to pay its rent. The estate agent who brokered the deal, never got his commission.

In 2002, the Income-Tax Department was hunting for Vatsa officials to recover dues of over Rs 600 crore. A few years ago, MTNL had sent a notice to a former director for non-payment of a telephone bill of Rs 3 lakh.

Over 250 depositors are fighting a case in a local Mumbai court, to get back over Rs 1 crore they invested as fixed deposits. And they are only a small part of the company8217;s total investors.

So, where did the money go?

The answer stares out of the company8217;s annual balance sheets. In 2000-2001, of its total Rs 4,560.70 crore investment, over Rs 3,800 crore was in unquoted scrips of Vatsa subsidiaries and another Rs 760 crore in Vatsa music.

Here8217;s another interesting tidbit from the books of accounts of the same year. Under the company8217;s fixed assets, the biggest component was 8216;decoration and wooden material8217; at Rs 845 lakh.

For a company whose primary business was dealing in financial securities, that8217;s a lot of money on, well, decoration. What8217;s even more fascinating is that its depreciation was 100 per cent, leaving it with zero value at the end of each year.

As early as 1995, I-T department sources reveal that Vatsa was claiming 100 per cent depreciation on trivial assets like sheds and bamboos.

Reports of such irregularities prompted the department to conduct nationwide raids in December 1995. Besides incriminating documents, the department seized cash and jewellery worth Rs 1.25 crore.

We R Toys, Toys R Us: The joke is on us

The company8217;s first two-three years of existence are hazy. A former director of the company, who preferred not to be named, says it was formed around 1988 by the name of Rolex Holding Ltd. A few years later it was renamed Vatsa. Around 1992-8217;94, the company went public. Soon after, Vatsa Music and Vatsa Education were launched, both of which were listed on the BSE.

Vatsa8217;s main business was dealing in financial securities. They were also operating lockers in Lokhandwala, Jogeshwari and Opera House in Mumbai, for which they charged certain deposit fees.

In 1995-8217;96, there was a string of MoUs with companies in Canada, Vancouver, Holland, Japan, USA, Italy and the UK. It owned various brand names like Bud Beer, We R Toys, Toys R Us, Smooth 038; Silky, Nce 038; Easy, Clo and Clare.

Colourful director

The group8217;s chairman Pradeep Vakil, who is reportedly an accounting whizkid, began his career as a milkman in Walkeshwar, Mumbai. Next, he was a partner in the Fort-based Vishnu Decorators. How he made his journey to floating Vatsa Corporation, along with a few 8216;friends8217; is unclear.

Another director, Haresh Joshi, was Vakil8217;s partner at Vishnu Decorators. When The Indian Express called him, he said, 8216;8216;I was not involved in the working of the company8230;My friends must have just written my name in the annual reports8230;8217;8217;

The company8217;s offices speak a story of their own.

At the Thane 8216;registered office8217;, only one employee showed up for one month in early 2000. Though the landlord hasn8217;t heard from the company since, Vatsa is not far from his mind. In the last three years, he has been inundated with letters from investors, demanding to know what happened to their shares sent for transfer or splitting.

What happened was that their original share certificates were neatly stacked in a dozen cartons and left to rot in this corner of Thane. 8216;8216;No Vatsa official has ever come to check these,8217;8217; says the landlord, who didn8217;t want to be named.

Vatsa8217;s corporate offices are in the six-floor Vatsa House at Janmabhoomi Marg, Fort. Enter, and the stench of urine hits you. The only other smell is that which emanates from the germs that feed on dead pigeons.

There is obviously no maintenance of the building. Tenants complain of lack of basic facilities like toilets, water and drainage system.

On each floor, at least two-three offices belonged to the Vatsa group. They all lie sealed now. Of the rest, many are closed because of the sad state of affairs.

The staircase to the main fifth floor office of Vatsa, which now bears the name Aaditya Luxury Hotels ltd, is locked on the fourth floor. One tenant says the name had been changed from Vatsa to Aaditya overnight, after the company got information that the police was going to seal its premises.

A man sits at entrance of the building lift, to collect all correspondence addressed to Vatsa.

Vatsa Corporation8217;s other offices in Opera House, Andheri and Jogeshwari are also shut. But these too aren8217;t without history.

The Opera House office of Vatsa Industries offered commercial vault services in 1996. Jewellers from the nearby diamond market loved the concept of safes open for 18 hours, and an annual interest of 18 per cent payable quarterly. Three years later, this amazing opportunity turned into a nightmare for three jewellers whose packets worth Rs 3 crore were allegedly stolen. Scared by this incident, other depositors wanted out. When they demanded their refundable security deposits back, the company8217;s executives and directors were unreachable.

Company topped list of complaints

Since 1997, Vatsa has topped the list of complaints at the stock exchange. Even today, the highest number of complaints pending with the National Stock Exchange is against Vatsa.

In August 1997, the number of complaints against Vatsa at Sebi topped at 9,600. A month later, the Coimbatore Stock Exchange delisted the company. Even NSE and BSE separately suspended trading for three days in the same year, after they were flooded with complaints.

Most complaints were about non-despatch of share certificates lodged for transfer, and non-payment of dividend despite declaration of the same.

In fact, in June 1998 Sebi filed criminal complaints against the company and four senior officers for non-redressal of complaints.

That didn8217;t stop the company from launching Vatsa Television Network 8212; 8216;a 24-hour non-stop music channel, for 54 countries8217;, in 1998.