By: Swaminathan Balasubramanian
Legal wrangles are nothing new for homegrown anti-virus major Quick Heal. After dropping cases against online marketplace SnapDeal, the company now has Manohar Malani, owner of the Kolkata-based technology delivery company NCS Computech in the cross-hair.
The entire channel partner community went into a tizzy earlier today following reports that police had arrested Malani based on a first information report (FIR) filed at the Shivaji Nagar police station in Pune in February by Quick Heal.
A statement signed by Quick Heal Company Secretary Vijay Shirode and mailed to both the Bombay Stock Exchange and National Stock Exchange said Malani was arrested on April 7 from Kolkata and brought to Pune on a transit warrant and formally remanded to custody till April 12, 2016.
It further said that charges pertaining to cheating, forgery and criminal intimidation were brought against Manohar Malani, “under Sections 420, 466, 467, 468, 469, 471, 474, 506 and 34 of the Indian Penal Code.”
The genesis of this legal wrangle began some months ago when Malani had approached the Securities and Exchange Board of India (SEBI) relating to ownership of shares of Quick Heal, which went public in early February this year. Malani had complained that he and some of his family members had been allotted 20,000 shares of Quick Heal in the year 2000, which post several bonus issues, now translated into a large stake. It was alleged that neither Malani, nor his associates, were listed as shareholders in Quick Heal.
However, Quick Heal repudiated this claim immediately after the company’s shares listed on the BSE and the NSE on February 18. They stated that no such amount was received from Malani or his associates for share application or subscription in 2000 and that the company had not allotted any shares to him or his relatives at any point.
It may be recalled that Quick Heal had raised Rs.451 crore via an IPO that opened on February 8 and closed two days later. However, on the day of it’s listing, the stock prices fell over 20 per cent to close at Rs.321. It is currently trading at Rs.226 a share on the BSE.
In the statement to the stock exchanges, Quick Heal further said, “The Company had never allotted any equity shares to the Claimants/Accused at any point in time and would continue to take all steps necessary to safeguard its shareholders’ interests and ensure that the Claimants law.”
News of the arrest resulted in ripples across the channel industry, which first received the information by way of social media messages (including Whatsapp). Though most of the partners believe that it is an internal matter of the company, they hoped that a solution would be found quickly. Insiders claimed that Manohar was a representative of Quick Heal in eastern India and that there could be more than meets the eye. A quick reference of the NCS Computech founder’s Linkedin.com profile did not suggest any formal connection with the anti-virus provider.
Readers may recall that Quick Heal has often been in the thick of controversies, mostly related to legal battles. They had squabbled with Snapdeal over sale of its products. Earlier, the company faced the ire of the All India Computer Traders’ Association and the Directorate-General of Central Excise Intelligence over some tax evasion issues.
Prior to these challenges, the company got into a tussle with its CD replication partners Softalk Technologies on some taxation issues, with the latter serving legal notices to Quick Heal over non-payment of dues. There was also some issue of value-added tax violation in Himachal Pradesh, for which the company got a clean chit from the relevant authorities.