The auctioning of the assets of Altos India Ltd, the
manufacturing company of erstwhile Pertech Computers Ltd (PCL), evoked lukewarm
response with only four respondents putting in their tender for the notice for
sale. The auction itself was a damp squib as only one of the tenders received
approval by the Official Liquidator appointed by the High Court. The rest of the
tenders were rejected on the grounds that the quotes were much lesser than the
official valuation of the assets.
The notice for sale was put up on April 8, 2001 and it
had put the following things on auction:
The machinery, computers, computer parts,
computer-related stocks, furniture and fixtures, electrical equipment, gensets,
etc at Plot No B-312, Okhla Industrial Area, Phase I, New Delhi.
The artifices containing imported conveyor belt-lines
using surface mounting technology and units under the EHTP, stocks, computers,
software computer components etc, spare parts and equipment of machinery,
electronic equipment, generator set of 125-KVA, air conditioner at Plot No 278,
Udyog Vihar, Phase II, Gurgaon.
The equipment containing imported conveyor belt-lines
using surface mounting technology and EHTP at Padma Tower II, 22 Rajendra
Palace, New Delhi and lift conveyor belt motor at Plot No B-65, Okhla Industrial
Area, Phase I, New Delhi.
The four respondents who turned up included Gurgaon-based
XO Infotech, Chandigarh-based Deltron Ltd, Delhi-based Siraj Enterprises and RK
Manik, owner of the building at 278, Udyog Vihar II, Gurgaon. The application of
Siraj Enterprises for machinery and stocks at B-312, Okhla Industrial Area was
rejected because it was without the mandatory draft of Rs 10 lakh. The tenders
of both XO Infotech and Deltron for machinery and stocks at Rajendra Place and
Okhla Industrial Estate were rejected since both had quoted Rs 45 lakh as
against the official valuation of the assets at Rs 16 crore and Rs 12 crore
respectively.
According to estimates, PCL's total credit stands at
around Rs 400 crore. Its major creditor is Bank of India with a host of other
secured creditors like ICICI, IDBI, Punjab National Bank, State Bank of India,
State Bank of Hyderabad, State Bank of Travancore, State Bank of Mysore and Exim
Bank. Going by the current state of affairs, it is unlikely that the creditors
will ever recover its dues. The Court is expected to call for fresh tenders and
that could take an eternity since the process could end up being a vicious
cycle.
On the other hand, there are also possibilities that the
valuation of the assets will undergo tremendous change as technology and thereby
the machinery used for it undergoes sea changes. Besides there are also
possibilities that the owners of the premises can get the permission of the
Court to move the assets to another premise. In that case the damage to the
machinery could be extensive as typically owners tend to outsource the task of
shifting who may not be familiar with the machinery and dismantle it in a manner
that would reduce it to being just scrap material.
There is yet another possibility to the fate of assets.
According to a source, there was a similar auction in November 2000 when the
assets were at another premise, E-300, Okhla Industrial Area I. But the auction
turned to be more of a farce and was abandoned. Later in an internal auction,
the same assets worth Rs 2 crore were sold off at unreasonably low rates
amounting to Rs 14 lakh.
PCL, which was set up in 1987, was the bete noire of the
Indian IT industry during the early nineties. It started off a price war in the
PC market forcing other domestic manufacturers to cut prices. The company also
had a sound dealership base of more than 300 dealers--whom the company called
Access Partners--and was probably the first PC vendor in the country to realize
the importance of channels.
With its maverick marketing strategies, PCL strode to
dominate the Indian PC scenario for three consecutive years in terms of unit
sales. In 1995, it came out with the biggest ever pubic issue in the history of
the Indian IT to raise a total of Rs 72 crore. By then, already a Rs 200 crore
plus company, PCL had set up a target to become a Rs 500 crore company by 1996.
It had almost achieved its goal with a turnover of Rs
476 crore in 1995-96. But it was also in 1996 that the decay in the company had
set in. The trouble started with the company losing its contract with Dell to
manufacture motherboards. It had also set up subsidiaries in UK, US and South
Africa, but had to sell them as it was not able to manage them efficiently. It
was the aftermath of losing its contract with Dell that PCL launched its
ambitious Millennium PC scheme, which was perhaps the final nail on its coffin.
A major reason for the decline of the PCL Group was that
it was unable to manage its transition from being a maverick start-up to being a
professionally regulated mature company. "While Shiv Nadar and Azim Premji
recognized the fine line between being entrepreneurs and handing over charge to
B-School mangers, PCL faltered at this juncture and met with its fate,"
pointed out a former Director of PCL.
By 1997, the company had debtors lined up knocking at
its door and unpaid employees committing suicides. Faced with losses, the
company filed for bankruptcy with the BIFR which was rejected. The Department of
Company Affairs then sealed the company's premises and put up its assets for
sale.
Today the infant terrible of the IT industry which was
the first Indian company to be featured on the cover of Dataquest, has met with
an ignominious end. But talk to any of the company's ex-employees and most still
say, "We shall happily work for the company if it revives and asks us to
come back." And that after working for one year without salary and getting
their PF after much litigation is quite a tribute to PCL.
(CNS)