Click to play videoNew Delhi: In October 2005, the Bombay Stock Exchange suspended trading in Pentamedia Graphics stocks after the Securities and Exchange Board of India (SEBI) found attempts to rig the market. Following this, the Pentamedia group was pushed to the brink, the group's majority businesses in the US dried up and cash flow was hit badly.
Owner Dr V Chandrasekaran had anticipated it all since 2000 and came up with a drastic overhaul of strategy and a mysterious scheme of 'amalgamation, arrangement and compromise' began to take shape. It all came in the shape of Mayajaal and Chandrashekharan literally created an illusion.
"Dr Chandrashekharan actually foresaw the problem he is going to face and created a special purpose vehicle into which he could offload valuable assets of the parent company, so that creditors and shareholders would not see the value that was inharent in the original Pentamedia," said Paul de Sousa, a litigant against Pentamedia.
According to sources in the Finance Ministry, the scam started unfolding in the year 2000.
Pentamedia Graphics acquired a small shell company Hotel Whales Pvt Ltd for just Rs 1 lakh, as it had neither assets nor revenue streams
It was subsequently renamed as Mayajaal Entertainment to offer various kinds of entertainment products and services.
The first company acquired was Chandrashekharan's good friend and Indian cricket's chief selector Krishnamachari Srikkant-owned Kris Srikkanth Sports Entertainment Limited.
In 2001, with assets from the parent company, Mayajaal developed the Family Entertainment Centre, which housed the biggest multiplex in India and in 2003, they developed a Sports Village in the same complex.
By 2004, in a scheme of amalgamation, arrangement and compromise, Pentamedia's animation and web entertainment business was de-merged into Mayajaal Entertainment Limited.
All these, came up in a single campus spread out over 27 acres of land away from the bustle of Chennai, on the scenic East Coast Road. Today, the property is worth at least Rs 1300 crore.
The scheme led to the steady decline of Pentamedia stocks. Shareholders saw their value plummet. The Income Tax Department, which had attached the immovable property of Pentasoft in 2003 and 2004, permitted the Schemes of Amalgamations to go through. In fact, Pentamedia created several small shell companies and started transferring the parent company's assets to those small entities.
Pentamedia has not reacted to specific CNN IBN queries. They only said, "Pentamedia has lost money and skills after 9/11 in USA. To realise part of their dues, the bankers have sold the assets pledged with them through DRT to realise part of their dues."
When CNN-IBN visited the house in Chennai, which is listed on all official records of Pentamedia as owner Chandrasekaran's residence, no one knew about any Chandrashekharan.
Investors have lost interest in the stock. It is a penny stock, but the promoters see value and recently bought back 5 per cent stake. The value and interest now seems to be only in the land bank of around 50 acres in the group companies including in Mayajaal, which markets estimates value at nearly Rs 2500 crore.
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