While Yash Birla is being portrayed as mourning over the loss of his private retreat near Kedarnath, there are thousands of small investors including senior citizens, doing the same for investing in his group companies in either stocks or FDs. After all, what can you expect from a head honcho known more for his lifestyle than business moves
 

Industrialist and Page3 regular Yash Birla is sad over the loss of his private retreat near Kedarnath, according to a Mumbai Mirror report, although the report tries to spin a story of how his heart is bleeding for those who lost their lives and property. However, both Mr Birla and the Yash Birla Group companies are silent about returning money worth about Rs100 crore, invested as fixed deposits (FDs), to small investors.

What is surprising is that while the devastation of Mr Birla’s private property and his bleeding heart have received front page ‘sympathetic’ coverage, there is not a single word about the sufferings of his investors, including several senior citizens, in other media except Moneylife. (Read: Yash Birla Group companies in deep trouble?)

As of March 2012, Yash Birla group companies owe Rs97.25 crore to small investors invested as fixed deposit. Birla Power Solutions owes the highest, Rs57.92 crore while Zenith Birla (India) owes Rs33.19 crore to FD holders. Birla Cotsyn (India) and Shloka Infotech have collected FDs worth Rs5.67 crore and Rs52.84 lakh from investors as of March 2012. Yash Birla group companies have not yet published reports for end-March 2013.

The report in Mumbai Mirror quoted Mr Birla as saying, “the house, named Ashok Vatika after the garden in the Ramayana, was a place of peace and meditation. It is now flattened and there is just barren land left. But I will rebuild it as soon as I can.”

The report further says Mr Birla is “a fitness enthusiast, partygoer, art collector, and trekker is intensely interested in religious and spiritual matters.”

A simple search on Google shows Mr Birla, a corporate honcho, is happier in the company of Bollywood stars than India Inc. He is more known for his lifestyle than business decisions or corporate moves. This is in contrast with other members from the Birla clan like Kumar Mangalam Birla, who is more in the news for his business moves and not for attending parties.

Yash Birla is one of the regulars on the Page3 of newspapers along with his wife Avanti. This may have helped him to get prominent coverage about the devastation of his private retreat in the media. The report tries to paint Mr Birla as a victim of the tragedy.

According to the report, the retreat called as Ashok Vatika was constructed four years ago as an extension of a dharmasala set up by Sunanda, mother of Yash Birla. In 1990 his father Ashok Vardhan, mother Sunanda and sister Sujata died in a plane crash.

Even considering the loss of his private retreat, there is however, not a single word about the huge debt he or his companies have. The Yash Birla Group of companies has been struggling, if the share price is anything to go by. Out of the eight companies, all but one gave negative returns since 1 March 2013.

Moneylife Foundation has been receiving complaints from its members that they are not receiving their fixed deposit maturity amounts from two Yash Birla Group companies namely Zenith Birla (India) and Birla Power Solutions. Birla Power had problems in paying tax dues as well.

Colaba resident Nandini Suchde has filed a first information report (FIR) for cheating to the tune of Rs2 crore against Mr Birla, his wife Avanti, and employees of Birla Power Solutions like PB Murthy, Anant Vardhan Pathak, Ashish Mahendrakar and Tushar Dey, says a report from Mid-Day.

According to the report, Ms Suchde claims that in the last three years, she invested nearly Rs5 crore in Birla Power Solutions, a Yash Birla Group entity, on an assurance of 2% interest per month.

What is surprising in this news report are the claims made in the statement from Yash Birla group advisor OP Jain. As per the Mr Jain, the investor (Ms Suchde) was issued a post-dated cheque drawn on Indian Overseas Bank (IOB) in February 2012 and it was required to be banked in March 2013. However, after receiving instructions on 31 October 2012 from the group's lead lender State Bank of India (SBI), its bank account with IOB was closed. “Once the IOB account was closed, replacement cheques from SBI were issued to complainant also. However the IOB cheques were not returned back to the company by the complainant and the same were misused to justify a false case. The company is legally dealing with the matter and is taking all necessary measures required,” Mr Jain was quoted as saying in the report.

According to a report in Business Standard, banks were likely to recall their loans from Birla Surya, a Yash Birla group company, which has defaulted on debt payment of about Rs1,000 crore. In April 2013, one of the lenders, United Bank of India had issued a public notice to the company for recovery of Rs70 crore. Birla Surya raised Rs1,000 crore from 11 lenders as capital in the first phase for setting up an integrated unit for fabrication of multi-crystalline silicon wafers and manufacturing of solar photovoltaic (SPV) cells in Maharashtra. The project was facing delays as the financial closure was not complete, with a major portion of the equity not tied-up. The project was also yet to receive the Pollution Control Board certificate, the report says.

In short, while the media is mourning over loss of his private property, there are hundreds of investors who are doing the same for investing in Yash Birla group of companies, either through stock market or as fixed deposits.

Moneylife sent an email to the Yash Birla group companies for their responses. Till the time of writing this story, we have not received any answers from them. We will incorporate their answers as and when we receive it.