MS Shoes

Pavan Sachdeva took over his father's Delhi-based shoe export business, mostly serving Western Europe, and launched the company as MS Shoes in 1986. He raised money from investors and borrowed large sums from financial institutions and banks. Sachdeva used intriguing ads created by the Delhi branch of Rediffusion to attract investors. During the period 1986–1993, the company won various export awards from the Council of Leather Exports, from Delhi Administration, and from the National Productivity Council. Apparently the share prices had been manipulated. When MS Shoes crashed in March 1995 the collateral effects were so severe that the Bombay Stock Exchange had to be closed for three days. More than ₹270 crores were lost. ==Investigations and charges==

The Central Bureau of Investigation (CBI) started an investigation in 1995. In June 1997 the CBI sought permission from the government to lay charges against senior officials of the Securities and Exchange Board of India (SEBI) and SBI Capital Markets, a subsidiary of the State Bank of India. Sachdeva was charged with violating the Companies Act and the Prevention of Corruption Act. In 2003, the CBI reopened the case. Several civil and criminal charges were filed. In June 2003 the Delhi High Court ordered that the company be sent to the Board for Industrial and Financial Reconstruction (BIFR). Few companies survive this process. In November 2005, MS Shoes was declared a sick company by the BIFR, and a plan was drawn up for its rehabilitation. ==Diversifications==

Before its collapse, the company attempted the bids floated by Hudco in July, 1994 for 5 star hotel land and a constructed four star hotel by Hudco comprising 363 rooms, 9 restaurants and 25 shops. The promoter Pavan Sachdeva made a successful bid for the properties. The total bid was ₹177.10 crores for which Hudco issued the allotment letters. When the public issue was devolved, Hudco cancelled the allotments. MS Shoes also attempted to go into the yarn manufacture business. The land value of ₹177.10 crores has increased more than ten times. MS Shoes has offered to buy the public shares to its existing public shareholders and presently promoters holding is 95%. ==Later development==

The production and export turnover of MS Shoes increased from ₹25 crores in 1993 to ₹171.93 crores in 1995. The company came up with public issues which were oversubscribed by more than 50 times. The reasons of sickness was devolvement of public issue and cancellation as well as forfeiture by Hudco of the amount paid of ₹68.68 crores by MS Shoes. ==References==