The Excise Department, Puducherry has cancelled the license of Ravikumar Distilleries Ltd. (RKDL) for various irregularities, which includes removal of IMFL from the factory without payment of Excise Duty, viz. illegal removal of liquor for cash for the last many years. The promoter Mr. R.V. RaviKumar has a long history of illegal activities starting from 2006, when with an intention in mind to dupe common public, he started showing profits in his company to launch an IPO. He contacted M/s. Keynote Corporate Services Limited (“Keynote”) a SEBI registered merchant banker in 2007 and signed a contract for IPO with them in 2008.The PBT was shown as below:
| Year Ended | Profit in Lacs Rs |
| 31/3/2007 | 149 |
| 31/3/2008 | 156 |
| 31/3/2009 | 228 |
| 31/3/2010 | 276 |
In 2009, RKDL signed a contract with Comfort Securities Ltd(CSL) for the IPO, without informing that it had earlier contracted another Merchant Banker. Only after a complaint to SEBI by Keynote, did RKDL settle the dispute with them.
In December 2010, Ravikumar Distilleries Limited came out with an IPO and garnered Rs.73.60 crores. Mr. R.V. Ravikumar diverted the entire amount so received into his pocket vide Rs.33 crores as “Advances to Suppliers” (his outstanding in Annual accounts as on date), Rs.22 crores to group company for land speculation, interest free which when received back alongwith the balance Rs.18 crores was taken out from the company by showing losses.
| 31/3/2011 | 133 |
| 31/3/2012 | 204 |
| 31/3/2013 | (202) |
| 31/3/2014 | (569) |
| 31/3/2015 | (602) |
| 31/3/2016 | (547) |
| 31/3/2017 | (317) |
| 31/3/2018 | (157) |
In consonance with ICDR regulations, RKDL at the relevant time had filed quarterly disclosure for December 2010 quarter. In the said quarterly disclosure,it was inter alia disclosed that till December 31, 2010 an amount of Rs. 37.51 crore has been utilized for the purpose of IPO and Rs. 36.08 crores is temporarily parked in fixed deposits &bank accounts. It may be noted that as per SEBI’s findings RKDL had taken an overdraft facility against the fixed deposit and had transferred the amounts to his related entities.
On May 22, 2011, RKDL filed its Annual Report of 2010-11 with the exchanges. In the said Annual Report, with regard to the utilization of IPO proceeds, it had inter alia disclosed that out of the IPO money raised by them i.e. Rs 73.60 crores, they had utilized Rs 34.25 crores till March 31, 2011, and the remaining Rs 39.35 crores is temporarily invested in banks accounts by way of Fixed Deposits and Mutual Fund investment.
Subsequently, RKDL in its quarterly disclosure for June 2011 had inter alia disclosed that till June 30, 2011 an amount of Rs. 38.94 crore has been utilized for the purpose of IPO and remaining amount of Rs.34.66 crore is temporarily invested in bank accounts including fixed deposits.
Subsequently, in the quarterly disclosure for September 2011 quarter, RKDL inter alia disclosed that entire IPO proceeds of Rs 73.60 crores have been utilized by them
At this juncture it is pertinent to note that all such disclosures and Annual Accounts are audited and discussed in the Audit Committee of the Board of Directors and then passed by the Board for publication.
Subsequently, on January 05, 2012, Union Bank of India filed a complaint with SEBI stating that Mr R.V. Ravikumar, promoter of RKDL, had availed loans for Vanilla Cultivation and also a Car loan from Union Bank of India, T. Nagar, Chennai branch, and an amount of Rs 199 lacs is outstanding with interest charged upto 30.09.2011. The complaint further stated that Mr. Ravikumar defaulted in payment of interest and instalments, thus constraining the Bank to classify the accounts as Non-Performing Assets and there was no disclosure of these borrowings in the RHP of RKDL.
RKDL had taken loans from Comfort Intech Ltd(CIL) , the first of Rs 12.71 crores from October 2010-December 2010 which was repaid with interest on 24th December 2010 after deduction of applicable TDS by RKDL. The second loan was post the IPO, during February 2011, Mr. Ravikumar on behalf of RKDL had once again approached CIL seeking a short term loan for its working capital requirements. Based on request of RKDL CIL had granted a total loan of Rs. 6.82 crores at the rate of 18 % p.a. The said loan was released to RKDL, based on its request, in different tranches during February 2011 to August 2011. In order to inter alia give security for the said loan, the promoters of RKDL including Ravikumar had given duly signed DIS pledge forms. The Appellant submits that the loan of Rs. 6.82 crores availed by RKDL from the Appellant during February 2011 to August 2011 was not repaid within time. Under the circumstances, a disclosure was made by the Appellant to the exchange regarding creation of pledge of shares in its favour to the extent of 51.77 % by the promoters of RKDL.
Since the loan was not repaid, CIL invoked the pledge and recovered its loan through sale of shares in the market. The promoters of RKDL first lodged a complaint against the invocation of pledge and then settled the matter with CIL and informed the stock exchanges of the amicable settlement on 27/12/2011, after realizing their error .
Further with the hue and cry wrongly raised by RKDL On 06.02.2012,and with information coming of a probable SEBI investigation, Mr. R.V. Ravikumar entered into an MOU for squaring up of entries in his Books of Accounts to the tune of approx. Rs.33 crores by way of Cash to Cheque and Cheque to Cash, wherein he would be given bills of machinery / infrastructure. This scheme of his could not go through due to start of investigation of SEBI in 2012. The aforesaid MOU also stated that his bank account would be utilized for these transactions.
On the matter being investigated by SEBI in 2012, Mr Ravikumar conveniently gave a story of giving over 100 blank signed cheques to the Director of the Merchant Banker, Anil Agrawal and stating that the Merchant Banker transferred funds from the bank account of RKDL for nearly one and a half years, but neither Mr Ravikumar nor any of the Directors of the Company was aware of the same. He had further diverted an amount of Rs.22 crores to his sister concerns for land purchase in Karnataka (ostensibly to put up a new Unit but actually land speculation).
RKDL has filed 6 cases against the various suppliers to whom the money has been diverted from IPO and one against CIL, in Bombay High Court in 2014 ( six years earlier) just to show that he is vigorously following up the recovery. However he is either not following up on the cases, 5 of which are still in pre admission stage or he does not provide documents. In one of the case, where the matter was brought up for filing of evidence etc, RKDL withdrew the case on pretext of change of lawyer.
Mr. R.V. Ravikumar has also indulged in Benaami transactions and has also violated sections of the Companies Act by transferring funds to his employees / associates, partly from his own account / RKDL company account for purchase of shares of his company, RKDL through 3 nominee companies, i.e. Chiraag Suppliers Pvt. Ltd., Nandlal Vyapaar Pvt. Ltd. and BPJ Holding Pvt. Ltd.. These companies are holding over 27.35% (combined) in RKDL and the same have been shown as public holdings. He is actively supported in all his endeavors by a high ranking Whole Time Member (WTM)of SEBI. The said Whole Time Member has also ensured that the hearing and Order for such violation by Mr. R.V. Ravikumar and Associates is not being passed by SEBI. In this matter, SEBI is only passing Orders for those Noticees who are now deceased, thereby ensuring that the matter is not concluded and final Order indicting Mr. R.V. Ravikumar and Associates is not passed.
SEBI had also given clearance to BSE to clear the deposit of Rs73 lacs(1% of IPO value as per guidelines) in 2015 inspite of the investigation being underway on RKDL by SEBI itself. This also shows high level of influence utilisation
His account had become NPA with SBI and by exercising political pressure, he has done a one-time settlement and thus caused a huge loss of Rs.13.21 crores (out of outstandings of Rs.20.96 crores) i.e. 63% written off to the bank. The amount of cash generated by him through illegal despatch and sale of liquors without payment of Duty is realized in cash, which is utilized for payment to various authorities, including police, politicians, SEBI and other Govt. officials.
Mr Ravikumar took over S V Distilleries Pvt Ltd in Bidar , Karnataka in 2010/2011. At the time of takeover the Company had Secured loan of Rs 2241 lacs and unsecured loans of Rs 1082 lacsi.e total Rs 3323 lacs . As on 31/3/2019 the figures have substantially to Secured loans- Rs 2505 lacs and unsecured loans to Rs 10808 lacs i.e total of Rs 11313 lacs ( an increase of nearly 80 crores) the Company has incurred losses for the last few years as can be seen below
| IN LAKHS | |||
| Year | TURNOVER | NPBT | RESERVES |
| March 31,2011 | 797.67 | 4.13 | 432.61 |
| March 31,2012 | 1893.42 | 7.21 | 439.82 |
| March 31,2013 | 1335.17 | -174.3 | 267.91 |
| March 31,2014 | 667.34 | -336.6 | -68.69 |
| March 31,2015 | 537.68 | -146.31 | -216.91 |
| March 31,2016 | 176.18 | -96.79 | -314.93 |
| March 31,2017 | 0 | -261.32 | -576.79 |
| March 31,2018 | 0 | -77.15 | -654.40 |
| March 31,2019 | 0 | -77.60 | -732.00 |
As can be seen that the company has stopped production for last few years. The shareholding of the Company has also changed with 67% of the shareholding being transferred in 2017/2018 to an entity called WAYNE-BURT PETROCHEMICALS PRIVATE LTD. This Company is also ACTIVE-NON COMPLIANT AS PER MCA SITE. This also shows the mismanagement of Mr Ravikumar in handling of industries.
