Advertisment

Mumbai trader defaults on Rs 2.5cr; shuts shop

author-image
DQW Bureau
New Update



Advertisment

The new year seems to have brought with it some bad news for the channel in
Mumbai. Allegedly the proprietor of ABS Systems has fled after defaulting
payments amounting to approximately Rs 2.5 crore. Industry people believe that
close to 25-30 partners are waiting to receive payment from the company.

Sources said that ABS Systems owes around Rs 40 lakh to MEK Peripherals and
Rs 35 lakh to NC Infotech alone. Sandeep Jain of MEK Peripherals and Ashok Joshi
of NC Infotech conceded that ABS System was their debtor and had yet to repay
them, but did not confirm the amount they were to receive. It is reported that
Arhinat Infomatics is another company at the receiving end of the default. It is
being speculated that the current economy meltdown could be the reason for these
default cases, as several channel partners are making huge losses and are not
getting payments on time from their customers. In some of the cities a few
distributors, resellers and sub distributors have been compelled to close shop.

But according to a few industry insiders this was not the case with ABS
Systems. They allege that this default had been well planned much in advance.
This is why Trade Association of Information Technology (TAIT) has gotten into
action in this case and lodged a formal complaint against ABS Systems with the
Mumbai police. “It was planned at least two months in advance. He was not paying
anyone since last two months,” said Champak Raj Gujjar, Director, TAIT.

Advertisment

ABS System has been in business for over a decade and was owned by Amit Seth.
Located in the western suburbs of Mumbai it was a reseller for several major
brands. Sources said that he had held back payments for two month citing various
reasons. Recently, he had made payment to all creditors by post dated cheques
and asked them to encash it on Dec 26, 2008. But the cheques were dishonored and
when the creditors tried to get in touch with Seth, he could not be found.
Besides owing money to IT traders, it has been reported that Sheth owed some
private lenders as well.

According to a source, Seth and his family is now absconding. He had informed
his father that he was shutting down his business due to credit issues.

TAIT has asked all its members to send details of outstanding amounts and
products sold to ABS Systems so that they can pass on the information to the
police.

Advertisment