Cash crunch leads to defaults

In view of the increase in payment defaults that is further leading to credit

crunch in the market, Progressive Channel Association of Information Technology

(PCAIT) has circulated a mail among its members warning them not to extend

credit without proper financial planning and thorough information about the

concerned party. In addition, PCAIT is assisting another Delhi-based association

Computer Media Dealers Association (CMDA) Delhi to lodge a complaint with

Economic Offence Wing (EOW) against a Janakpuri-based partner who allegedly

duped certain members of CMDA-Delhi to the tune of Rs 50 lakh.

Sharing details about the mail, Saket Kapur, Secretary, PCAIT mentioned,

“There have been several instances in the recent past when IT associations

across the country informed PCAIT about fraud cases and problems that their

members are facing. These problems were pertaining to lack of liquid cash in the

market. So we resolved to circulate a mail warning our members to be cautious

before give out goods on credit.”

Kapoor mentioned that the cost of doing business is going up as the rent for

premises has increased by two to three times in the past. Not to mention, the

cost of hiring employee is also increasing. CMDA- Delhi on the other hand is

making every effort to support those members who have been allegedly duped.

Citing instances of a Janakpuri-based partner and a similar instance in Nehru

Place, the parties that have defaulted payments and in turn filed cases against

the members who raised their voice against their faulty practices, V Krishnan,

Executive Secretary, PCAIT stated, “A Nehru Place partner allegedly duped a

group of partners in New Delhi and then leveled allegations of harassment and

threat to life and property against them. A Janakpuri-based partner allegedly

failed to pay back amounts to the tune of Rs 50 lakh to certain members of CMDA-Delhi.

Further more the proprietor has also filed a case against partners mentioning

that they have been threatening and harassing him.”

Krishnan further added that when approached by CMDA-Delhi members, PCAIT

assisted them in bringing the matter to the notice of EOW.

Elaborating further, Puneet Singhal President, CMDA-Delhi shared, “The

payment default and credit crunch matter is worsening with every passing day and

hence the association resolved to warn its members before extending credit to

anyone in the industry. Vendors and distis would have to look into the situation

and revise the targets so that there is less pressure on tier-2 partners.”