Helios Matheson

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Helios and Matheson Information Technology Ltd has informed BSE that the Honble Division Bench of the Madras High Court has granted an interim stay of the winding up order passed by the Honble Single Judge of the Madras High Court.

Office of the Official Liquidator High Court Madras Ministry of Corporate Affairs has informed BSE that by an order of the Honble High Court Madras dated January 21 2016 in C.P.Nos. 143 to 145/2015 & 414 to 416/2015 the Official Liquidator has been appointed as the Provisional Liquidator of Helios and Matheson Information Technology Ltd with directions to take charge of all the properties and effects of the said company. A copy of winding up order is enclosed.

Helios and Matheson Information Technology Ltd has informed BSE about the Shareholding Pattern as on June 30 2015.

Helios and Matheson Information Technology Ltd vide its letter dated June 09 2015 has informed BSE that the Company has extended the accounting year for a period of 18 months closing the year on March 31 2015 to be in compliance with the Provisions of the Companies Act 2013.. Pursuant to Clause 41 of the Listing Agreement the Company has to publish audited financial results both stand alone and consolidated for the year ended March 31 2015 before May 31 2015.<BR><BR>This in turn has made it difficult to complete audit of accounts for the extended period for both the holding company and its subsidiaries within the stipulated time. Consequently there is a delay in publishing the results despite best efforts to ensure compliance.

The Exchange had sought clarification from Helios and Matheson Information Technology Ltd with respect to news article appearing on Moneylife website titled Former chairman of Helios and Matheson among three top executives arrested<BR><BR>Helios and Matheson Information Technology Ltd replied stating We are writing this note to clarify the position as regards the action initiated by the Economic Offences Wing (EOW) Chennai Police against our client Helios and Matheson Information Technology Limited Chennai (hereinafter referred to as Helios) under the provisions of Tamil Nadu Protection of Interests of Depositors (in Financial Establishments) Act 1997 (hereinafter referred to as TNPID Act) and the counter actions initiated by us in defending the same.<BR><BR>Helios has been receiving certain deposits from the public under section 58A of the Companies Act 1956 (Old Act) since 2000 and has been repaying the depositors in time till the new companies Act 2013 come into force. There were no complaints whatsoever from even single investor all these years. The New Companies Act 2013 came into force on April 1 2014 wherein section 58A of the Old Act was replaced by sections 73-76 of the New Act. New statutory compliances were put in place under the New Act which impacted routine business operations overnight and several companies in corporate India (Helios included) approached the CLB for time to handle the transition for statutory compliance mandated by the new amendments. While so we have been falsely implicated without any legal basis due to some motivated actions. A case has been registered in Crime No. 5 of 2015 on the file of the EOW Chennai based on a complaint lodged by a depositor alleging that Helios violated section 5 of the TNPID Act since the company failed to repay his deposit before April 1 2015. This case was registered on April 1 2015 while our petition was pending before CLB (Sr. No. 3/2015).<BR><BR>At the outset we wish to clarify that Helios is a world-renowned IT/software solutions company and not a financial establishment and therefore the TNPID Act would have no application to Helios. The following paragraphs would demonstrate as to why the actions are without jurisdiction erroneous and void ab initio.<BR><BR>The police have no powers under the TNPID Act to investigate the case without sanction from the competent authority. This was the specific ground raised in Crl. O.P. No. 21711 of 2007 filed by a litigant and the same was dismissed. However on appeal before the Supreme Court the Honble Supreme Court in SLP (Crl) No. 53 of 2009 granted an order of interim stay of all further proceedings by the police. The SLP is still pending. Because of the interim stay the Honble Madras High Court has granted interim orders is various similarly placed cases. Therefore as of today the police (EOW) have no power to even register a case under the TNPID Act because of the Supreme Court Order. All the actions are blatantly without jurisdiction.<BR><BR>Moreover insofar as companies registered under the Companies Act are concerned the TNPID Act will have no application at all because its very objective nature and scheme is to deal with the unregistered unorganized and unregulated financial sector in the state (unregistered financial establishments chit funds Ponzi schemes and the like). By no stretch of imagination could it be argued that companies in the organized sector which are not financial establishments and registered under the central statute fall within the ambit of TNPID. This would strike at the heart of the principles of federalism enshrined in the preamble to the Indian Constitution.<BR> <BR>Even when the constitutional validity of the TNPID Act was upheld by the Supreme Court in the Baskaran Case it specifically stated that the said Act would apply only to Fraudulent Financial Establishments not companies receiving deposits under section 58A of the Companies Act. The apex court further held that they operate in two different and contra distinguishable fields. Thus the police have no jurisdiction in the matter and the power is vested completely with the Company Law Board. Section 74 (2) of the Companies Act 2013 provides that when a company is unable to pay back the deposits received under the old act within 1 year i.e. 01.04.2015 an application may be made before CLB for extension of time. Accordingly application has been made bearing Sr. No. 3/2015 and notice has been sent to all depositors. Therefore until CLB decides the matter no offence can be made out against petitioners. Otherwise section 74(2) will be rendered nugatory. There have been several instances of companies submitting scheme of repayment and being granted time in a rather liberal way by the CLB because of the interpretational confusion and commotion created by the New Companies Act 2013.<BR><BR>Thus to summarize we have moved appropriate petitions to challenge the actions taken against us by way of a petition seeking to quash all criminal proceedings before the Madras High Court. At this juncture it would suffice to say that the police (EOW) moved a petition seeking police custody before the Special Court TNPID Cases namely Crl MP 632 of 2015 and the same was dismissed by the court and decided in our favour. We are confident that Helios will come out unblemished in the present matter and will be vindicated of all the unjust and illegal actions initiated against the company. Needless to say the present scenario will have absolutely no impact on the operations of the company in any manner whatsoever.<BR><BR>Our clients state that they would be happy to furnish more information if any in this regard over the phone or via email. Needless to say our clients would also send a team from our law office to make a presentation to clarify intricate points of law and fact in the present matter. Feel free to contact our clients if you need further elaboration.