Power Solutions dupes Lucknow and MP channel

Lucknow-based Power Solutions has allegedly taken close to 15 partners in the
region for a ride. In addition, trade in parts of Madhya Pradesh, including
cities such as Indore, Gwalior and Bhopal have also been affected since Power
Solutions also resold goods at lesser prices in these cities.

Lucknow Computer Vyapar Mandal (LCVM), the local association, is looking into
the issue and planning to take legal action. Meanwhile, Rahul Pandey,
Proprietor, Power Solutions and Vivek Tiwary, Manager, Power Solutions, who till
sometime back were absconding, are supposed to be back in town now, though they
remained unreachable.

When DQ Channels got in touch with the association, a dealer and
representative of the association mentioned, “The dealer had been operating in
the region for the past one year and used to buy several products including
products of companies like HP, Dell, Intel, LG and other such brands from
sub-distributors in the region at the existing dealer prices and sell it at a
lower price in Lucknow and in other parts of Madhya Pradesh. However, it was
only in December 2008 that the cheques started bouncing. Initially, Pandey used
to pay cash while buying goods, but later when he built a rapport in the market,
he started taking stock on credit. Later the cheques he had issued to the
sub-distributors in the region started bouncing. During the period when he was
absconding, he used to give calls to some of the dealers and assured them that
he would return them their amounts. Some of the dealers tried to approach his
family members. Now, with the association taking note of the situation, the
issue is likely to get resolved.”

The issue has again brought into limelight the problem of undercutting. Power
Solutions used to buy the products at the prevailing market prices and then
resell it at two percent less than the amount on which he had bought the goods.
Pandey never used to issue credit notes and was selling a lot of stock by
undercutting the prices. This has affected the Lucknow and MP market and
businesses for many of the dealers in the region has been severely affected.

Market sources clearly state that though it is difficult to asses the exact
amount by which the channel has been duped, this scam could be anywhere to the
tune of Rs 2-3 crore.