Know The Failure Of Shakti Bhog In Depth
Shakti Bhog Foods ltd. is an unlisted public company incorporated on November 24th, 1992. It is classified as a non-government company and is registered at the Delhi Registrar of Companies. Shakti Bhog Foods Limited company caters to the packed food products segment. It manufactures, exports, and supplies Wheat, Wheat Flour, Maize Flour, Corn Flour, Rice, Snacks, Jam, Pickel, Papad, Mustard Oil, Sun Flower Oil, Soya Oil, Tea, Salt, Sugar, semolina, etc.
Shakti Bhog Foods Ltd. serve its customers in various countries all over the globe.
Its authorized share capital is INR 30.00 crores (3.93 million USD approx.), and its paid-up capital is INR 26.24 crores (3.439 million USD approx.).
Shakti Bhog Foods Limited’s Annual General Meeting (AGM) was last reported on October 30th, 2015, and as per the records from the Ministry of Corporate Affairs (MCA), its balance sheet was last filed on March 31st 2015.
How did the company start and grow?
Shakti Bhog Foods ltd. was founded by Mr. Kewal Krishan Kumar back in the year 1970. He is the CMD, CEO, and Director of the SHAKTI BHOG FOODS LIMITED. Mr. Kewal Kumar, an economics graduate from Shri Ram College of Commerce in Delhi, started his journey at his grandfather’s wheat milling unit, where he learned his basics and mastered the skills of milling.
He saw a huge scope in this business and decided to get into the packed food business and launched the Shakti Bhog branded atta initially in North India. The brand grew rapidly as the products were kept as natural as they could be and appealing to the consumers. Mr. Kewal Kumar rapidly started extending the offered product range by manufacturing more products like Gram Flour (besan), Semolina (sooji), Porridge (daliya), Rice Flakes (poha), and Fine Wheat Flour (maida). Its top competitor was ITC’s Ashirvaad brand.
Later on, Mr. Kewal Kumar introduced his elder son into the business in 2002, who then took up the distribution in the export markets. The NRI community abroad had a vast scope yearning for Indian-made packed food products, and, thus, the Shakti Bhog entered the export market and is now available in more than 50 countries.
Its current status:
The Shakti Bhog Foods ltd company’s current status is “active”.
There are 6 Directors and 2 Signatories associated with this organization. The Key Managerial Personnel (KMP) at Shakti Bhog Foods Limited India are- Rajeev Lochan as CS and Ganesh Gulati as CFO (KMP). And the directors of the SHAKTI BHOG company are Siddharth Kumar, Derivaux Robert Preston, Kewal Krishan Kumar, Krishan Kumar Sharma, Manju Sharma, and Manmohan Kapur Singh.
In a recent report on July 5th, 2021, the ED arrested the CMD of the SHAKTI BHOG, Mr. Kewal Krishan Kumar, and two others for banking fraud of multiple thousands of crores.
Financial reports of SHAKTI BHOG FOODS LTD :
Here is a summary of the financial reports of SHAKTI BHOG FOODS
LIMITED for the financial year ending March 31st, 2015.
⦁ SHAKTI BHOG FOODS LIMITED had a revenue/turnover of more than INR 500 crores.
⦁ The Net worth of the company decreased by -18.59 %.
⦁ The company’s EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortization) has decreased by -98.46 %.
⦁ Total assets of the company have increased by 1.89 %.
⦁ Current Liabilities of the company have increased by 8.79 %.
⦁ The Debt-equity ratio and the Current ratio were 4.12 and 1.14, respectively.
⦁ The Return on Equity has decreased by -22.84%.
How did the brand SHAKTI BHOG FOODS LTD fail?
This company was running and growing smoothly until the year 2015. In 2015, the company was found involved in money laundering activities by providing fake bills and reports to the banks.
This year, the Enforcement Directorate (ED) filed a fresh charge sheet against two operatives for having an “active involvement in the offense of money laundering in bank fraud of INR 3269.42 crores by the SHAKTI BHOG FOODS LIMITED”.
“They were actively involved in providing fake bills to the company without actual business transactions,” it was said in the charge sheet.
Based on the complaint filed by the State Bank of India (SBI), the CBI conducted investigations at eight locations in Delhi, at the official and residential premises of the accused, which led to the recovery of various incriminating documents and some digital evidence as part of an ongoing probe.
The complaint claims that the Shakti Bhog Company showed damage to an inventory of Rs 3,000 crores due to pests in its forensic audit of the financial Year 2015-16, which led to its sale at a low price. However, banks claimed that the firm’s stock and receivable audit report showed that the company’s warehouses had a stock of over Rs 3,500 crore in 2015, none of which was slow-moving or obsolete.
The 24-year-old company, which was into manufacturing and selling wheat, flour, rice, biscuits, cookies, etc., had grown organically as it ventured into food-related diversification over a decade, with a turnover growth of Rs 1,411 crore in 2008 to Rs 6,000 crore in 2014, the SBI bank complaint had said.
This incident had a significant impact on the downfall of the business of the SHAKTI BHOG FOODS LIMITED not only in India but all over the world.
Charges over SHAKTI BHOG FOODS LTD:
⦁ The total amount of available charges are INR 3,833.75 crores.
⦁ Total satisfied charges amount to INR 6,180.17 crores.
⦁ Total number of the lender(s) – 34
⦁ Top lender(s) – State Bank of India (INR 2,452.00 crores), State Bank of Hyderabad (INR 300.00 crores), Standard Chartered Bank (INR 197 Crores), Punjab National Bank (INR 150.00 Crores), State Bank of Bikaner & Jaipur (INR 126.00 Crores).
The SBI bank’s report to the CBI said the turnover growth of the SHAKTI BHOG FOODS LIMITED company came to an abrupt halt in 2015 with the account turning into an NPA (Non-Performing Asset), and it was ultimately declared a fraud in 2019.
Author: Shubham Ghosh
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