Does anyone know about the relationship between Satia Industries and Satia Paper Mills Private Limited?
- From the name, it seems they do very similar business, which is a little concerning (Please correct me if I am wrong). We have seen many companies gather public funds and scale up. Once the public business is scaled up to an extent, they set up a Private business in direct competition with the Public one. The Date of Registration of Satia Industries on 26-Nov-1980 and Satia Paper Mills Private Limited on 10-Mar-2000 seems to follow this trend. (Source: Tofler)
- I believe Satia Industries was called ‘Satia Paper Mills’ during incorporation. Effective 11/08/2008, roughly 8 years post incocporation of Satia Paper Mills Private Limited, the public limited company was renamed to ‘Satia Industries’. (Source: https://www.bseindia.com/downloads/ipo/20157318341IM%20PDF.pdf)
- They both seem to have at least 1 common Director in Mr. Chirag Satia, who is a Promoter as well as the Executive Director of Satia Industries. (Source: Tofler)
- Both companies are located in Muktsar, Punjab. (Source: Tofler)
- In the Annual Report of Satia Industries, Satia Paper Mills Private Limited is listed under the header ‘Individual owning directly or indirectly substantial interest in the voting power of the Company’. But I do not see any other mention of this company elsewhere (Nothing in the Shareholding Section or Subsidiary Companies section). (Source: https://www.bseindia.com/xml-data/corpfiling/AttachHis/a424c661-edd5-4787-93fe-b084671643b6.pdf)
Other Legal information I could find in public domain about Satia Industries:
- During 2005, the company was going apparently through some Debt trouble. Hence, a considerable equity induction of 22,50,000 Shares was done and the majority of it was Preferentially alloted to the Promoters at Rs. 10 per share, via which the Promoter(s) were able to up their stake in the company from 35.18% to 51.38% at the cost of equity stake dilution of FIIs, Banks and Public Shareholders (Details: https://www.sebi.gov.in/sebi_data/docfiles/15986_t.html). Presently, the Promoters put together hold 52.46% of the company as on Sep 2023)
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Also back in 1997, the company made some preferential allotment of shares totalling 7,30,000 and was fined Rs. 1.5 lakhs for it by SEBI in 2009 (SEBI called it ‘unintentional non-compliance’). (Source: https://www.sebi.gov.in/sebi_data/attachdocs/1289367540098.pdf). Not sure why the fine came so late.
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There was a petition filed against Satia Industries in 2019 by one Arihant Traders Private Limited. But it seems the petition was dropped in 2022 due to lack of legal representation from the Petitioner (Source: https://www.casemine.com/judgement/in/64a3ec7ccbd9ea05f1d80153).
I am trying to follow the company, and came up with all this information on my initial round of research. I would really appreciate some clarification from someone in the know or investors who have been following this company closely, especially concerning the Corporate Governance Standards of the company. Thank you.
Alternatively – if existing Shareholders are able to communicate with the Company Secretary – can you please ask them to clarify, especially:
- Regarding the relationship between Satia Industries and Satia Paper Mills Private Limited.
- Regarding the kind of business which Satia Paper Mills Private Limited is involved in (More relevant bit is whether they are in direct competition for any lines of products which Satia Industries produces or markets).
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