Besieged Indian cloud firm Zenith Infotech loses $10M in six months

Summary:Losses widen for the firm amid a US$83 million legal action from its creditors and fraud allegations by India's stock market regulator.

Zenith Infotech has lost US$10.8 million (584.2 million rupees) over the six months ending March 31, getting deeper into the red amid its legal battles.

Last week, the Indian cloud computing provider published its second quarter earnings, revealing losses widened by four times compared to the first half of the previous financial year--when the company lost US$2.5 million (133.8 million rupees).
 
besieged-indian-cloud-firm-zenith-infotech-loses-10m-in-six-months
The bulk of the H1FY13 losses came in the three months ended March, when the company lost US$7.8 million (421.3 million rupees).
 
The report notes that a US$3.5 million (189.6 million rupees) "exceptional item" was interest accrued after ZIL defaulted on a US$50 million loan in October 2011. However, Zenith has not acknowledged the interest as the debt is still being disputed.
 
In 2011, the company's creditors initiated action in the Bombay Supreme Court to recoup total loans of US$83 million.
 

India's stock market regulator recently alleged that ZIL promoters siphoned company funds into their own personal companies. It ordered them to guarantee a US$33 million bank loan.

At the company's annual general meeting earlier this year, ZIL chairman Rajkumar Saraf denied any wrongdoing by the company's promoters.

Topics: Cloud, India, Legal

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Mahesh Sharma earned his pen licence in his homeland, where he covered the technology industry for ZDNet, SMH, Sky Business News, and The Australian--first as an FTE, and later as a freelancer. The latter fueled his passion for startups and empowered a unique perspective on entrepreneurs' passion to solve problems using technology. Armed... Full Bio

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