Hemani group's financials in jeopardy, promoters on the run

Nagpur Mahila Nagarik Sahakari Bank files case for Rs 4 cr defrauding against the group

A major financial default by the heavily diversified Hemani group of companies has raised a question mark over the future of the group. Aman Hemani, chairman of the group, is facing a criminal case of cheating a co-operative bank to the tune of Rs 4 crore.

Hemani, along with his wife Rajshree, have not been seen in the city for the last one and a half months, leaving a string of banks and creditors in the lurch.

All the group companies and production units have come to a halt due to lack of funds, giving credence to ugly rumours of the group's financial status.

The Hemani couple are learnt to be in Mumbai. They once dreamt of making Hemani group a Rs 1,000 crore entity, but couldn't really give shape to their ambitions. Big budget publicity campaigns didn't help them.

The biggest loser in this story of the spectacular rise and fall of the Hemani group seems to be Nagpur Mahila Nagarik Sahakari Bank. The bank discounted cheques of Rs 4 crore presented by Aman Hemani in March and April, only to learn later that they were dishonoured.

Hemani promised to pay the entire amount, but was able to offer a mere Rs 68 lakh. When further payments stopped, the panic-stricken bank lodged a complaint at Ambazari police station seeking action under section 138 of Negotiable Instruments Act.

It has named Hemani, his associate in Bhilai and one of its own managers as the offenders. Hemani group's total outstandings are learnt to be more than Rs 7 crore. Market creditors and suppliers owe Rs 50 lakh, sources said.

The Hemani group comprises Amanraj Construction, Amanraj Garments, Amanraj Paints & Dyes and Amanraj Beverages. All these are private limited companies.

Amanraj Garments made shirts in the brand name of Adam Parker, Amanraj Paints made paints branded as Lemon Colorscape and Amanraj Beverages made cold drinks and fruit beer with a brand name Daddy Cool. The garment and paint units are in Butibori while its beverages unit is situated in MIDC Hingna.

Significantly, all the brands were launched in close succession to each other in 2003. Adam Parker was the first to be launched in April, followed by Daddy Cool and Lemon Colorscape. The brands were promoted across the country.

But while Adam Parker and Lemon Colorscape failed, Daddy Cool did exceptionally well in markets in Vidarbha and Marathwada and was in high demand even in Nasik and Aurangabad. Sources said that Daddy Cool made a 3 per cent dent in the market share of Pepsi and Coca-Cola in a very short period.

Before the start of the summer season, the rival companies were gearing up to beat Daddy Cool's competition but, fortunately for them, Daddy Cool crumbled on its own.

People close to the firm said that they were surprised by the group's sorry financial state. This was because Daddy Cool could have taken the group to prosperity. The brand earned over Rs 1 crore for the company.

While a part of this money went into paying salaries and meeting administrative expenses, a major part seems to have vanished, probably with the promoters themselves, sources said.

The Hemanis, who started with construction, diversified themselves at a dangerously fast pace, sources said. No one knows from where the Hemanis got the money to buy factories and have a lavish lifestyle.

Meanwhile, employees are hopeful that the Hemanis would come to Nagpur and revive the company. They have not been paid their salaries since February. The group's plush head office at Canal Road, Ramdaspeth, has around 35 employees. There are nearly 100 employees in the three factories at Butibori and Hingna.

Efforts to contact Aman Hemani failed as calls to his cellphone went unanswered.

Glitzy fashion shows, massive promotion campaigns preceded the launch of its shirt brand Adam Parker. Hemanis spent around Rs 7 lakh on a fashion show at Pride Hotel in Nagpur, Rs 10 lakh on a fashion show at Hyderabad.

Yet another glitz and glamour show was organised at a posh hotel in Mumbai. But these massive promo campaigns were never supported by better product quality. Its first two lots of shirts totaling 9,000 were rejected by dealers for fault in design, size and stitching.

Afterwards the production was stopped and some of the shirts were sold at a heavy discount at Rs 200 with the price tag reading at Rs 1,500. Rest of the shirts were sold in lots at dirt cheap prices, sources said.

The bad quality story was repeated in paints too.

The company was able to sell products worth only Rs 40 lakh. And even then it had to face a lot of complaints. The paint, sources said, would either run or peel off and not "remain on the wall after drying".

In beverages, though the company made money, it failed to pay its raw material suppliers. Due to this, the supplies of raw materials stopped and consequently, the production stopped, sources said.

The company's profligacy in hiring top executives at fancy salaries is legendary. Executives from top firms such as Pepsi, Mudra Communications, Live-In Jeans, Kores joined Hemanis but a bleak future lies ahead for them.