Though Champion Textiles Limited made a minuscule profit of Rs1.5 lakh after a decade and a half of existence, the company has bought large tracts of land in Coimbatore, and acquired a company with assets worth crores.
VRS Natarajan, chairman and managing director of BEML Ltd, allegedly routes the money earned as commission from the procurement of Tatra truck components through Champion Textiles Limited, a public limited company incorporated by his family in 1995.
Though Champion made a minuscule profit of Rs1.5 lakh after a decade and a half of existence, the company has bought large tracts of land in Coimbatore, Natarajan’s hometown, and also acquired a company with assets worth crores. DNA has a copy of the sale deeds for several plots bought by Champion.
Other documents in DNA’s possession confirm that Natarajan and his family members promoted Champion Textiles Limited, with him as shareholder and other relatives as directors and shareholders.
As per the annual returns of Champion for the year 2010, filed with the registrar of companies (ROC), Shanti, Natarajan’s wife, and their daughters Madhumitha and Radha Rekha are directors of the company. They hold most of the company’s shares, worth Rs4,89,980/- out of the total share capital of Rs5 lakh.
According to the ROC, till May 2010, the company’s registered office was in Chennai. When DNA visited the address, however, we found the flat had been rented out for the past three years.
Curiously, the registered office of the company was shifted to Defence Colony in Bangalore in 2010, to the BEML chairman’s official quarters, though the code of conduct for the senior management of BEML prohibits the use of official residences for personal gain.
Following protests from BEML employees, the registered office was shifted to another place in Bangalore, which is owned by Natarajan. When we visited this address, however, we found that the multi-storey building had been rented out to a multinational company and there was no sign of Champion Textiles there.
Since the family-held firm has only just made a paltry profit, there was a question mark on the source of funds for investment in several properties. Champion’s balance sheet for 2008-2009 revealed that Shanti Natarajan, Radha Rekha Natarajan and Madhumitha Natarajan had lent Rs19.25 lakh, Rs2.5 lakh and Rs2 lakh, respectively, to the company as unsecured loans to tally the balance sheet against the fixed assets bought by the company.
But as a public limited company, Champion Textiles cannot accept unsecured loans from its directors or shareholders and doing so is a punishable offence under the Companies Act, 1956.
The plots bought by Champion were also acquired at far below the market price. For instance, on April 10, 2008, the company represented by SN Thenmoli, managing director, bought 6.56 acres of prime land in Irugur village, Coimbatore, for a paltry Rs5,17,000 (Rs 78,000 per acre), when its market value then was roughly Rs2 crore.
In 2009-10, Champion Textiles also bought a Coimbatore-based firm called Amex Alloys Private Ltd, incorporated in 2003, for a song. Amex Alloys was a temporary vendor of BEML and manufactures and supplies machined and un-machined steel in different forms with an annual installed capacity of 3,000 metric tonnes. Amex has the status of ‘well-known foundry’ from the Central Boilers Board, government of India.
Documents available with DNA show that the company’s net worth (total assets) in 2009 was Rs8.2 crore; Natarajan, his family, and close associate Sridhar Balaram bought 62% in this company for just Rs62 lakh. After the buyout, Balaram became chairman of the company and Radha Rekha Natarajan and Shanti Natarajan became directors.
According to a former BEML employee, Balaram is a close friend of Natarajan. “Balaram’s company Galvano Castings Private Limited, a permanent vendor of BEML, was given undue favours despite failing to execute pending orders and the poor quality of its casting,” the ex-employee said.
Recently Numeric Power Systems, a Chennai-based company, bought 92% of the share capital of Amex Alloys for Rs4.21 crore.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}