CLB finds Pentamedia guilty

Chennai, Aug 1 | Updated: Aug 2 2005, 05:30am hrs
Close on the heels of asking the Centre to have five nominees on the scam tainted DSQ Softwares director board, Chennai bench of the Company Law Board (CLB) has directed the Union government to appoint two of its nominees on the board of directors of Pentamedia Graphics Ltd, a company promoted by V Chandrasekaran, for a tenure of three years as a corrective step.

CLB, late last month, found the Dinesh Dalmia-promoted DSQ Software guilty of fudging accounts and asked Centre to nominate five directors on its board. Both DSQ and Pentamedia were among the fallen bull Ketan Parekhs favourite KP 10 list.The CLB order came in the wake of a petition filed by the Central government seeking its direction to appoint government nominees on the companys director board. The Centre, in its petition, has alleged that the company has ignored the shareholders interests in several transactions including the sale of its software division to its sister concern Pentasoft Technologies Ltd. The approximate losses suffered by the company in these transaction was over Rs 700 crore.

According to the CLB order, Pentamedia has suffered huge losses in its transaction with Pentasoft Technologies Ltd. The company sold its software division to Pentasoft in 2000 for a consideration of Rs 894.21 crore in a stock-cash deal. While it has received Rs 530.21 croe in stock - 66,45,550 shares at par with a premium of Rs 788 per share, the remaining was paid in cash. However, in a short span of time, Pentasofts share price was tanked to Rs 22 to Rs 44 per share thereby adversely affecting the companys financial position and causing prejudice to its shareholders, the CLB said.