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Sai InfoSystems’ chief Kakkad arrested in Rs1,400 crore fraud

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Kakkad’s arrest comes as a ray of hope for over 1,400 staff members of SIS as well as its lenders, which comprise banks like SBI, BoB, IDBI, AllahabadBank and Vijaya Bank

The Gujarat police have finally taken custody of Ahmedabad-based IT company Sai Info System (SIS)'s fugitive chairman Sunil Kakkad after his arrest in the West African country of Liberia early this month, says a report from the Hindu Business Line. Kakkad's arrest comes as a ray of hope for SIS' over 1,400 employees as well as seven lenders, including public sector banks, who have given the company a loan of Rs1,035 crore.

According to the report, after a tip-off from the local police in the Liberian capital Monrovia, the Central Bureau of Investigation (CBI) had alerted Gujarat Police about Kakkad’s hideout. Later, in a joint operation by local police and Interpol, Kakkad was held in Monrovia.

Kakkad, the chief of Sai InfoSystem, which was platinum sponsor of Vibrant Gujarat summit, and his family was absconding since June 2013 after duping  lenders and suppliers, following which a red corner notice was issued against him. The company had not even paid salaries to its about 1,400 employees besides not paying any taxes, insurance and provident fund deductions to the government.

Quoting police sources, the report says, after fleeing from India, Kakkad opened another company called Enrich Gold Resources Corporation in Liberia and decided to stay there as it did not have extradition treaty with India.

But, after getting a tip-off from the Interpol, the Gujarat Police prepared a dossier and a team of three police officers met the chief of police in Liberia, it added.

Sai Infosystems borrowed Rs1,035 crore as loan from seven lenders. Of this Rs794.32 crore came from five banks, State Bank of India (SBI), State Bank of Bikaner and Jaipur (SBBJ), Industrial Development Bank of India (IDBI), Bank of Baroda (BoB) andAllahabad Bank. Atrium Infocom, a unit of SIS borrowed another Rs97.20 crore from SBI and Vijaya Bank while another group entity, Click Telecom, obtained a loan of Rs144.16 crore from SBI, Vijaya Bank and Canara Bank.

The company used to win many big projects as it was under-quoting in bids which resulted in large losses. SIS had won the Mumbai City Surveillance Project, which included deploying 6,000 internet protocol IP cameras for a bid of Rs700 crore against the second nearest bid of Rs1,000 crore by AGC Networks. SIS had also won a contract from the Department of Post for digitisation of several processes. For this, SIS had bid Rs1,500 crore, while the second bidder quoted Rs2,200 crore.
However, according to the auditor’s report of FY 2011-2012, SIS was a profit making company which had turnover of Rs1,618.97 crore, networth of Rs475.90 crore and net profit of Rs113.18 crore.
SBI has issued a public notice warning people against dealing with SIS, its associates or in its assets. Employees have also registered a first information report (FIR) against the directors of the company at Vastrapur Police Station in Ahmadabad under section 114, 409 and 418 of IPC. This has led to the arrest of Samir Kakkad, brother of SIS’s CMD Sunil Kakkad. The company’s assets have been seized by the lenders. 
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