Crimson Logic

When SHCIL bagged the prestigious e-stamping contract, it hired Crimson Logic, a well-known Singapore-based company, as the technology vendor. At that stage, Jayaraman Iyer “defrauded” SHCIL by splitting the contract with Crimson Logic and unnecessarily routing it through SSL and its 100 per cent subsidiary Unitec Value Solutions. So SHCIL signed an agreement with Unitech and Unitech, in turn, signed the technology agreement with Crimson Logic. SHCIL’s petition says that Crimson Logic was originally to be paid $5million, but this was doubled to $10 million while splitting the contract and a hefty royalty of 4 per cent was additionally charged on SHCIL’s net revenue. The petition calls the dealings a “clandestine conspiracy to transfer funds out of India” in foreign exchange to the benefit of a few individuals. If all this weren’t bad enough, the petition says that R Jayaraman Iyer received a monthly remuneration from SSL without informing the SHCIL board, where he was CMD. Simultaneously, he made Ramanathan (CEO of SSL) an advisor and later sr vice-president of SHCIL, ensuring complete control over both entities and obfuscating their activities. The petition openly alleges that Jayaraman and Ramanathan probably had other sources of income that need to be investigated. Finally, it charges what we have already disclosed earlier — that SHCIL’s infrastructure was being utilised by SSL with impunity and without appropriate compensation and causing losses to the parent entity. The brazenness of SHCIL’s CMD in defrauding a public sector company under his management is probably unparalleled in recent decades. The fact that Iyer and Ramanathan were extremely close to the Sebi brass arguably provided them additional credibility. KPMG has now been assigned the task of unraveling all their dubious contractual arrangements, quantifying the loss to SHCIL and checking the antecedents of all entities who were allotted SSL shares.

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