Prashant Desai CEO will come out on the just side
Explaining the recent action taken by the Economic Offence Wing of the Mumbai Police on 20th July 2016 of seizing its assets worth Rs.2000 Crs, Mr. Prashant Desai – CEO, MD came out strongly to put the company’s point of view to the media and also clarifies the Mumbai Police Action.
Speaking to CNBC-TV18 CEO and MD Prashant Desai clarified Mumbai police did not come and takeover FT Tower and the letter merely says they are securing to attach these assets. “If they need to attach they will again have to go to the court of law,” he adds. However, this act is unwarranted and at certain level this is not legal, he says. Desai also claims the MCA probe could not find a money trail leading up to the embattled group. “If tomorrow it is proven in the court of law that NSEL is at fault and FTIL was aware of this and FTIL has conspired with NSEL to do this fault, the courts of India will properly give us adequate punishment,” he said. Below few questions and answers as given to the CNBC reporter.
Q: Can you tell us about the merger with NSEL and your strategy going forward?
A: I don’t think government has stated anything like that. What we are principally saying is the fundamental or the grounds on which we are opposing all of these actions is very simple. We are saying we are a democracy, it is ruled by the court of law. You are saying, I am at fault, I am saying you are at fault. Who will decide who is at fault? In our view, the courts have to decide. Just be patient, if tomorrow it is proven in the court of law that NSEL is at fault and FTIL was aware of this and FTIL has conspired with NSEL to do this fault, the courts of India will properly give us adequate punishment, merge after that, change my board after that, freeze my assets after that but all matters are subjudice, nowhere is it even proven that even NSEL is at fault, forget FTIL and you are making these actions on FTIL, that is our fundamental problem. Our problem is not that we will not defend, we will not cooperate. I am saying despite all this action, we have taken a view that we will still respect judiciary, we will still respect investigations, we will still respect every land of law in this country, we will continue to be cooperative with every single investigative agency, whatever information they want, even after three years, we will provide them despite whatever happens with us, we will continue to be a respectable citizen of this country.
Q: The legal issues aside, help us understand — if I am correct, the market share in terms of cashflows, in terms of the overall balance sheet has suffered in the last one year — the impact on the balance sheet over the last one year and what are you doing to mitigate those issues to be able to sustain yourselves in the next one year?
A: Being a financial channel, probably you will be able to understand this better. So has there been an impact on our revenues because of the NSEL payment default crisis, answer is yes. We saw a majority of that impact in 2013-2014 and 2014-2015 where I believe our revenues would have come down by about 25-35 percent but after that we are now seeing stabilisation that is happening there. The biggest cost to FTIL is opportunity cost. Today if you look around the country and the way this country is developing in progressing, if you look at the way digital India is moving ahead, the way digital venture is taking place, we believe FTIL could be at the epicentre of this. Our ability to contribute from a technology perspective to this entire digitization can be massive.
Q: What is your stance on the action taken by Mumbai Police against Financial Technologies India Limited (FTIL)?
A: That FTIL is in dire straits is probably an understatement. The reason why we feel it is an understatement is because of the kind of action that has meted against FTIL despite there being no money trail established to FTIL or its promoters and this is not something that we are saying, this is something the Ministry of Corporate Affairs, their application for 396 in terms of the merger very clearly specified that there is no money trail established to either FTIL or its promoters. Despite that this is the kind of action that we get meted upon with and therefore obviously it poses its own challenges and we see every challenge as an opportunity of sorts in that sense and that’s how we will have to remain positive to probably combat what happening with us, so let’s first take on the point that you rightly mentioned about the Economic Offence Wing (EOW) letter just to clarify they have not frozen the bank accounts, just to clarify as your channel has reported at that point of time, Mumbai Police did not come and takeover FT Tower, letter merely says they are securing to attach these assets. Securing to attach means that they are saying if you want to use any of this please go to the court of law, take the court of law’s permission and then you can do that. If they need to attach they will again have to go to the court of law. Now obviously we believe that this is unwarranted, we also believe at certain level this is not legal, they don’t have the power to issue such a letter.
Q: How many redundancies there have been over the last couple of years and given the kind of financial crisis and the financial pressure that is on you as thing stand, your employees would want to know what is the future for them in the next one year?
A: It is not just now that we have shared with our employees what is the future, but ever since this payment default has happened we have continuously engaged with our employees and I will be very happy to report that despite these kind of challenges that an organisation likes our have faced, we have not seen any significant attrition. At the senior level probably the attrition is less than 1 percent. On a G1-G2 level in a normal IT company you will have 15-20 percent attrition, but we have been able to keep this core team intact