Note to readers: An earlier version of the article qualified SecureKloud as a “Sandeep Tandon-backed company”. This is to clarify that Sandeep Tandon is not a promoter, board member or a shareholder. The inadvertent remark is regretted.
The Directorate of Enforcement on March 24 arrested the promoters of a listed entity, SecureKloud Technologies - Suresh Venkatachari and RS Ramani - under the provisions of the Prevention of Money Laundering Act.
The company said in an exchange filing that Venkatachari shall cease to be the president of the company with "immediate effect".
On March 24, the stock ended at Rs 38.6 on the NSE, lower by 3.6 percent from the previous close. The stock is down over 80 percent from its all-time high level touched in October 2021. Its market capitalisation now stands at Rs 133 crore.
What does Securekloud do?
As per the company's website, SecureKloud enables digital transformation for enterprises with cloud-based solutions. "We have helped organizations including Fortune 500 giants embrace the cloud with security and agility while following industry best practices," reads the company's LinkedIn profile. It is based in the San Francisco Bay area.
The company clocked annual sales of Rs 849 crore in March 2018, which fell to Rs 382 crore in March 2020 and stood at Rs 379 for FY22. During the same time period, the bottom line has swung between Rs 205 crore of net profit and Rs 98 crore of net loss. Operating margins have also been inconsistent, as per data from Screener.
Also Read: ‘Devastated' and 'humiliated', independent director quits Modulex Construction Technologies
Shareholding
As of December 2022, the promoter and promoter group held a 43.52 percent stake in the company. Venkatachari held 42.13 percent and Ramani held 1.39 percent. Public shareholding stood at 56.48 percent.
Dubious past
In January 2021, 8K Miles rebranded itself as SecureKloud Technologies Ltd.
8K Miles was always in the limelight for the wrong reasons.
From August 1, 2011 to September 30, 2012 and January 4, 2012 to September 28, 2012 respectively, there was "unusual price movement in the scrip". SEBI prima facie found that various connected entities had indulged in fraudulent and manipulative trading in the stock.
In 2018, when the stock was spiralling down, Venkatachari said that 8K Miles will initiate legal action against Quantum Global Securities Ltd and Kumar Share Brokers Ltd for the illegal transfer of promoter shares worth 8.42 percent equity of the company.
Following that, in an audit conducted in 2019, Deloitte flagged false disclosures by the management and misrepresentation in financial statements.
Also Read: ‘Finfluencer’ openly flouts norms, implies over 11,000% in a year
"We came across certain transactions that gave us reason to believe that suspected offences involving fraud have been committed in the company," it said.
The audit report said that two independent directors on the company's board were never really "independent" as their relatives were employed in 8K Miles.
Deloitte also found several instances of transactions with vendors, wherein there were "inconsistencies between the nature of services as mentioned in the invoices and the basis of recording in the books of account as consultancy expenses, intangible assets, multiple federal tax identification against the same vendor, contracts signed by employees post cessation of their employment, etc."
In 2020, trading was suspended in the stock for a few weeks due to the company's non-submission of financial results for two consecutive quarters.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
