More defaults in Bengaluru market gets partners jittery

Post the scam involving Jupiter IT Solutions, who absconded from the
Bengaluru IT market with pending dues amounting to Rs 2 to3 crore, now another
Bengaluru-based company KS Info Systems has allegedly defaulted on credit
payments of around Rs 35 lakh, and Shiva Basavaiah, Proprietor of the company,
has absconded. Many dealers in Bengaluru have registered police complaints
against Basavaiah. KS Info System has to pay Rs 9 lakh to Iris Computers. The
company has secured an arrest warrant against Basavaiah in Delhi. “We had learnt
that KS Info Systems was a fly-by-night operator and Basavaiah was staying as a
paying guest in Bengaluru. He has defaulted on payments amounting to “Rs 9 lakh
following which we resolved to take the matter to court. This was an HCL deal
and since we had very recently added HCL to our portfolio we were expecting to
secure good results for the same this quarter. However, post this incident we
are going to be even more careful in closing deals with HCL partners,” mentioned
Kamini Talwar, Director, Delhi-based Iris Computers.

According to market sources, around six to seven dealers, apart from Jupiter
and KS Info Systems, have made credit defaults worth crores of rupees.
Meanwhile, dealers who had defaulted on credit payments were given a chance till
Dec 6, and were asked to clear their cases to prevent any legal action being
taken against them. A source on the condition of anonymity confirmed that around
three to four dealers issued cheques worth Rs 1.5 crore to creditors.  “As
of now a case has been booked only against Jupiter and KS Info Systems. We will
come to know about the other defaults only after sometime. At this point we
can't just blame people as it may be prove wrong if their payments come
through,” the source stated.

Last week the Association for IT (AIT), Bengaluru conducted their annual
general meeting in which certain decisions pertaining to defaulters were taken.
The association has decided to start an e-mail group for its members, where any
news or alerts regarding defaulters would be sent across to partners. Jayessh
Mehta, President, AIT and MD of Future Businesstech India said, “During our AGM
the issue of rising credit defaults was discussed. We have decided that when any
dealer's cheque is dishonored we will send a group e-mail to caution other
dealers and minimize such occurrences.”