Burdened by debts, partner commits suicide

The harsh realities of slowdown have caused havoc in the Coimbatore market
with one channel partner committing suicide and another partner absconding from
the market.

P Pannier Selvam, Proprietor, Micro Points allegedly committed suicide on
March 22 and Mohan Prabhu, Proprietor, Thyle Systems has been reported missing
since March 20, 2009. The total amount these two partners owe to the market is
said to be nearly Rs 50-60 lakh.

While partners in the region were unwilling to comment on the issue due to
the suicide case and preferred to distance themselves from the issue. Increase
in various financial commitments and bad position of the market are said to be
the reasons behind this incident. “We learned that these two partners were doing
business with each other and had several financial commitments. Moreover, Selvam
is said to have supplied materials to Thyle Systems, who is now absconding. This
must have left Selvam with no choice but to take this extreme step,” said a
leading channel partner in the region on the condition of anonymity.

Selvam is said to have been operating in the market with a different name
since the past four to five years, and was running his business since the past
one year under the name of Micro Point. It is also said that before committing
suicide, Selvam has blamed two companies, including Thyle Systems, for the
reason for his taking the extreme step, through an SMS to few dealers.

Till date no FIR has been registered about the absconding dealer and some
action on this front is expected to be taken within a day or two, as only
recently a new team has take over in Coimbatore Information Technology
Association (CITA).

Channel partners are blaming over stocking of products beyond limit of the
market for the incidents. Moreover, giving credit to unknown people is also said
to be the reason for increase in such incidents among the channel community.
“There are too many IT products today and a dealer can't stock one particular
product in a huge number. There is a limit for every market and going beyond
that limit is dangerous. Moreover, target pressures set by the vendors and their
incentives force dealers to push their products through various means;
undercutting is one of them,” claimed C Balakrishnan, VP, Confed-ITA.

Pointing out that most of the partners are operating under losses YoY for the
sake of performing trade, he said that the practice would surely land them in a
cash crunch situation in a few year's time.

Warning partners on issuing credit to unknown people, Balakrishnan said that
dealers must ensure that credit is given only to credible people. “Erode IT
association is taking steps to blacklist partners who are regular defaulters. We
will ask partners to suggest such names and this list would be circulated in our
community so that we do not fall prey to such situations. This step should be
followed in each and every city to prevent any extreme incidents,” Balakrishnan
said.