Partners in Coimbatore fall prey to slowdown

Chennai: The harsh realities of a slowdown are slowly setting in the Coimbatore market with one channel partner committing suicide and yet another partner absconding from the market.

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

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.

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 the 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 the 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.