CA, insurance agent, now Air India bidder … a trail of many questions

Written by Sandeep Singh, Pranav Mukul, Aashish Aryan | New Delhi |

Updated: December 17, 2020, 7:25:10 am

This is the government’s second attempt to divest its stake in the airline after the previous move ended without an offer in 2018.

LAXMI PRASAD PALAYPU, chairman of US-based Interups Inc, made a number of takeover bids this year and recently through the NCLT Filed an expression of interest in the divestment of Air India – Says he plans to invest around $ 9 billion in India’s aviation sector. However, a review of the dealings the company “pursues” in India reveals mixed, if not poor, results.

Information accessed by the Registrar of Companies shows that Palaypu was a director in three companies. Two of them, Lakhi Investment Management Services and ISBN Securities Pvt Ltd, have already been deleted.

The third, ISBN (India) Pvt Limited, is still “active” but assets that were billed for 1.2 billion rupees back in 2010 remain that way to this day, according to RoC records. When asked about this, Palaypu told The Indian Express, “It’s something we noticed recently … My wife was the CEO and she signed the papers. She plans to come to India and we plan to reach an agreement with the bankers and close the case. “

In a filing for filing with the SEC on August 7, 2020, Interups Inc announced that it would pursue nine businesses in India (including the acquisition of Air India) in the twelve-month period ending May 2021. There is no significant investment the company has made in India to date and some of the deals it claims to pursue have failed.

Interups, a Shell company he acquired in 2016, currently manages retirement accounts for more than 27,000 customers in the U.S., which are mostly NRIs, according to Palaypu. According to Bloomberg, the company had a market capitalization of $ 27.6 million (around Rs 200 billion) on Wednesday.

As a chartered accountant, he worked for almost a decade in various accounting firms in Hyderabad between 1986 and 1995, as his LinkedIn profile shows. He moved to the US in 1997 and sold insurance products at Prudential Financial. In 2002, he founded his own company, IBSN Inc, and by 2007 he is said to have filed tax returns for 55 percent of the total Indian software migrant population with a migrant background in the United States.

Of the nine deals that Interups claims to be handling in India, one includes the acquisition of a 100 percent stake in Asian Color Coated Ispat Ltd (ACCIL). In October 2019, however, NCLT approved the wind-up plan submitted by JSW Steel, practically closing this chapter for Interups.

A source close to the ACCIL liquidation process claimed that Interups was not serious. “It made an offer well after the due date and then raised concerns that it was never heard,” the source said. Palaypu accepted that they entered the offer late. “We will apply to the Supreme Court for an ACCIL offer,” he said.

Another acquisition that the company allegedly “pursues” but has failed is in real estate. In the SEC filing, the company announced that it had signed terms to acquire two residential towers from the Phoenix Kessaku project in Bengaluru for Rs 528. A source close to development said the contract with Interups was already from Phoenix Mills Ltd. been terminated. “While Interups signed the term sheet with Phoenix Mills to acquire the two towers, there were no changes to the due diligence or deadlines for CA transportation. , Insurance Agent, Now Air India Bidder; Palaypu has little to show when it comes to closing deals that weren’t kept. Following this, Phoenix Mills announced the agreement in September, “the source said.

However, Palaypu said the price negotiations are still ongoing and that it is more of a financial structure issue: “We did not fail to complete the due diligence. … It is a structural issue. We cannot rush to things. “

Another deal that Interups has labeled “pursuit” but which is a roadblock involves the purchase of 49 percent of AirAsia India for and on behalf of its non-Indian customers. AirAsia India is a joint venture airline of Tata Sons and AirAsia Bhd from Malaysia and operates in India. Struggling AirAsia Bhd had reportedly agreed to sell its 49 percent stake, but the deal failed because Tata Sons turned down the offer. The two partners have the first right to refuse to participate in the company. Even if Interups claims to proceed with the acquisition and the Tata Group does not agree, the company is unlikely to close the deal with its chairman, who says he has now discontinued the acquisition.

In addition to Air India, some other businesses that the company claims to be pursuing include the acquisition of Hotel Claridges, a 100 percent stake in Hotel Intercontinental, Mahabalipuram and 51 percent in Viceroy Hotels. For the Claridges Hotel, Palaypu said he met the hotel’s chairman, Suresh Nanda, on Nov. 22, and the deal is about to close.

The company is also seeking a 100 percent acquisition of Reliance Naval & Engineering Company Ltd and has submitted its preliminary expression of interest. It has also applied to acquire Lavasa Corporation – a 10,800 acre city that it plans to develop as an educational city. In addition, the company is aiming for some deals in the real estate and financial services industries.

All of this is still in the works, however, and it remains to be seen if Interups will finally be able to complete any of these.

Globally, the company is believed to have invested in oil palm plantations in Malaysia (£ 120 million), an integrated real estate project in Malaysia (US $ 140 million) and a Ghana-based gold mining company. The company has also set ambitious goals for the next three years. In an SEC filing dated September 20, 2020, the company announced that it expected sales of $ 1.48 billion for the fiscal year ending May 2023. In addition, the company plans to expand its presence in the United States, Europe, and the Middle East, Australia, East Asia, and South Africa over the next three years.

According to the latest available figures reported to the SEC, Interups posted revenues of $ 139.99 million and net income of $ 101.49 million for the period March 1, 2020 through June 15, 2020. The consolidated figures are released on January 4, 2021.

According to his LinkedIn profile, Palaypu was an auditor at various accounting firms in Hyderabad between 1986 and 1995. In 1997 he moved to the USA, where he acquired the status of auditor.

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