Rolta India strips off its key assets, turns tech complex into a scrap yard
- Rommel Rodrigues
- Jan 03, 2022
MUMBAI: Information technology company Rolta India Ltd (RIL) which is saddled with huge debt and over the past few years has been reduced to a shell company with little or no credible business is now literally stripping off its key properties of all its infrastructure right down to the spoon.
Over the past few days, the once-bustling premises that housed three large IT buildings under a complex called Rolta Technology Park, situated in the MIDC area of Mumbai have been ripped off and the large campus has been turned into a scrapyard.
A place which used to be flocked by high quality IT professionals a few years ago now houses scrap merchants who are seen scavenging every single piece of equipment like computers, servers, desks chairs and other furniture from the buildings in the premises which are called as Tower A, B and C.
When we talked to one scrap trader from inside he said that the company has given out a contract for Rs 95 lakh for whatever is contained in one of the towers. He said that they will be stripping off the building of everything inside even if it was a spoon, and he laughed as he said we will even be ripping off the glass facade wrapping up the building exterior to sell in scrap.
He said that the owners of the company personally haggled with them on the phone for the scrap and was surprised that he was first demanding Rs 2 crore, however, he said that they met midway for the deal.
Ironically this is the same ground-plus-three storey building that had caught fire a year ago (in February 2020) and while the cause of which has remained a mystery till date as the company never issued a statement on that, however it did write off a value of Rs 162.84 crores due to the fire in its profit and loss for the financial year (FY) 2020-2021.
Speaking to us on condition of anonymity an employee of the company confirmed that the scrap dealers will be cleaning off the building called Tower C which housed one of the now-defunct companies called Rolta Defence. He said that he along with many others have not been paid wages for the past 6 months and the senior staff has assured them that they would be paid from the payment that comes from the scrap dealers.
A former employee who has worked in the company's security department for over two and a half decades said that it is indeed very sad to see the complex which once housed nearly a thousand-odd professionals from some of the top global companies had been reduced to a scrap yard.
He says he has seen days when top ambassadors of European countries, top government and military officers used to visit the premises and were amazed to see such well developed IT complex. "The greed of one man finished this company," he laments adding that the company also owes him some dues in wages but he has given it up.
An official who was a former banker to the company based in the same premises however had a different story for this stipping business. According to him, the said complex along with several other properties of the promoters including their houses are mortgaged with a consortium of several banks which has lent to a tune of over Rs 5,000 crores.
He feels that the banks that have initiated legal proceedings to recover their dues may be putting up the fixed assets on the block either for outright sale or for auction and it was possible that the promoter may be emptying the premises to take away all its possession before the building was seized. He however also added that in the past the promoters have managed to avert such a move by moving the court for relief.
Rolta is indeed a sad story of a promising IT company that went down the hill. Just five years ago for FY 2016-17 the company had posted net revenue of Rs 3,180 crores with a profit of Rs 167 crore, however, since then it has sunk in deep red.
For subsequent FYs 17-18, 18-19, 19-20 and 20-21 the company posted revenues of Rs 2,861 crores, Rs 2,161 crore, Rs 1,492 crore and Rs 943 crore respectively. However, the net loss for the same period that is for FYs 17-18, 18-19, 19-20 and 20-21 has been Rs 106 crores, Rs 3,657 crore, Rs 915 crore and 3,264 crore. This is a kind of pit that hardly any company has been known to have come out of unless there is some windfall or some divine intervention.
Talking of the current year the website of the company has not updated its quarterly financials however according to the figures available on the exchanges where they share is still listed, for the first quarter of FY 21-22 ending June 21 the company has earned a revenue of Rs 3.27 crore and a net loss of Rs 152.19 crore, while for the September quarter the company has earned a revenue of Rs 1.51 crore and a net loss of Rs 225.54 crore.
If the remaining two quarters go on the same path, the company could be looking at an annual turnover of less than Rs 10 crore with a loss that cannot even be fathomed as of now.
Rolta is under heavy debt which it built up over the years, which (as of the end of March 2020) included global bond-holders with an outstanding due of Rs 3,762 crore and domestic PSU banks like Union Bank of India, Bank of India, Bank of Baroda, Central Bank of India and Syndicate Bank with dues of Rs 4,308.27 crore in debt.
In the annual report for FY 20-21, the borrowings figures are given as secured borrowings to the tune of Rs 5,007.39 crore and unsecured borrowings of Rs 3,279.84 crores. So the total borrowings as of FY ending March 2021 stood at a whopping Rs 8,287.21 crores.
Apart from this several hundred former employees who have not been paid wages, suppliers, contractors and others have appealed in the National Company Law Tribunal (NCLT) to initiate an insolvency resolution plan to recover their dues. In the last few years, several creditors got Rolta admitted to NCLT but it has managed to wriggle out of it. (Read it here: How Rolta's creditors were stonewalled against insolvency proceedings)
Interestingly while the promoters of Rolta under the founder, chairman and managing director, Kamal K Singh are literally stripping off all the assets, for a couple of years now, they continue to peddle a con on the shareholders and everyone else by saying that they plan to come out of the debt trap by 'repayment and restructuring its liabilities' under a Definitive Restructuring Services Agreement (RSA) with the 'Streamcast Group' which it signed on August 6, 2019.
The whole business with the 'Streamcast Group' as per one of our reports was a big hoax and never going to happen. The promoters continue to peddle the hoax to date. (Read it here: Rolta India's ruse with NCLT and the 'Streamcast' hoax)