MBO Computers Mani arrested for Rs 10 cr fraud

CHENNAI
 

JULY 29, 2006

MBO Computers
proprietor TS Pichumani alias Mani was arrested and remanded to judicial custody
last week under the charges of cheating and forgery. According to market
reports, Mani has cheated ING Vysya Bank to the tune of Rs 10 crore by
submitting fake documents and availing LC (letter of credit). In fact, the crime
came to light when Mani was dodging the bank while repaying and ING Vysya
officials contacted the customer (LIC Kanpur and Delhi - which was mentioned in
the LC) to verify the order placed by them with MBO Computers. It was found out
that MBO Computers did not supply any goods to them. Soon, the bank officials
have lodged a complaint with Commissioner of Police. And, now, Mani is under
judicial custody and moving court for bail. "Our director will come out
soon and he is likely to get bail any time. We do not know anything related to
this issue and I am also not authorized to speak about it," said a senior
employee at MBO Computers.

Mani, and his wife
Saraswathi - who is also one of the directors in the company, approached ING
Vysya Bank in the city and availed of various loans by way of mortgaging and
received Rs 10 crore in cash. They submitted the documents of company stocks,
title deeds and book debts to the bank. However, Saraswathi escaped arrest by
producing anticipatory bail, said market sources.

The ING Vysya Bank
official had confirmed the news but, denied to talk much as the case is under
the legal purview.

The arrest of Mani
has sent shock wave among resellers who are hard to believe this story. "I
know him for many years in business and he is more than a friend. I was
surprised and shocked to hear Mani got arrested under cheating case. He is from
a respected family background and well-enough family. But, he was undergoing
some crucial period in business, which I am aware of," said a leading
consumables dealer in Chennai. He also confirmed that Mani owes him some money
in business.

There are many
stories quoted for Mani's sudden crisis and debacle in business. While some say,
Mani lost a key and trusted manager about four years back who went on to start
business in the same line and poach customers, few mention that a lady staff
working there presently swindled the money and put Mani in crisis. However, all
of them said MBO Computers was once a leading name in consumables business and
grew exponentially in the market, setting up offices across the country. MBO
Computers' growth was mainly attributed to its relationship with iMation and the
company was a major importer of its products once. "The rise and fall of
Mani was with the same iMation. Till iMation set up office in India (Chennai) in
2005, MBO Computers was doing a good business as an importer. But, the direct
presence of iMation changed the state of affairs and resellers started to buy
iMation products directly from the company and not through MBO Computers' route,
which badly hit his (Mani) business," pointed out another leading
consumables reseller in the city.

"iMation's
decision to come directly into India is the company's policy decision. India
offers huge opportunity and growth potential for the company. But, iMation's
direct presence has nothing to do with Mani's fall in business. It was only an
issue of mismanagement at MBO Computers. In fact, like MBO Computers, there were
at least 10 leading importers for iMation in the country earlier. And, the
company continued its business relationship with them, even after coming into
the market directly," said a close associate to iMation. He also said, Mani
went on with aggressive growth and expansion plans, which did not click well for
him. It is understood that Mani has invested some money to get into newer
distributions, which include their venture in Castrol Motor Oil. Mani runs
another company called Venus Marketing Limited for this purpose.

According to
market reports, Mani owes money for few resellers and iMation too, in business.
Though, it could not be ascertained at the moment, it is only a matter of time
before things come out. Will he settle the dues, is the biggest question in the
market now. Wait and watch.