Sentini Ceramica Pvt Ltd, a city-based company setting up a ceramic tiles unit near Vijayawada in Andhra Pradesh with an investment of Rs 65 crore (Rs 650 million), has run into a major controversy with the company's managing director facing charges of theft of confidential records from his former employer, and a city metropolitan magistrate court issuing search warrant against the accused.
The issue may take an interesting turn, since Sentini is setting up the project as a 50:50 joint venture with H&R Johnson (India) Limited, which in turn is a joint venture between Johnson Tiles, United Kingdom, and the Mumbai-based Rajan Raheja group.
According to the petition filed by the Hyderabad-based Regency Ceramics Limited, one of the major players in the southern ceramic tiles market with an annual turnover of Rs 150 crore (Rs 1,500 million), Sentini's managing director T Seshagiri Rao worked for the former from 1994 to February 2003, and by virtue of his position as president (marketing) came into possession of the confidential documents, material and information pertaining to the affairs of Regency Ceramics.
RCL in its petition before the court said that the accused through an e-mail on February 3, 2003 expressed his inability to continue in the service, but not bothered to hand over the charge.
It alleged that the accused had joined hands with the competitor, H&R Johnson (India) Ltd, to set up his own project and shared all the confidential information with the latter.
The petitioner further said that the telephone bills of the accused (paid by Regency) amply reflect that he was in regular touch with the officials of H&R Johnson even prior to the incorporation of his company and charged the same to RCL.
" It is clear from the letter addressed to the union ministry of petroleum on January 16, 2002 by Sentini, that Sentini had been working for a tie-up with Johnson prior to January 2002, while the accused continued his service in RCL till February 2003," the petitioner said.
"Joining hands with a competitor and sharing the confidential information constitutes breach of trust," RCL accused in its petition.
The court after hearing the petitioner issued warrant to city police to search the suspected places of deposit of stolen records. The city police acting upon the court order conducted raids on places belonging to Sentini's promoters and seized some documents.
However, when contacted, the managing director of Sentini Ceramica denied the allegations made by Regency in its petition.
"These are baseless. We are absolutely clean and we will fight the case in the courts", he said.
Sentini Ceramica, in a separate release, felt that Regency made false allegations as its leadership position in South was obviously under threat with the coming up of Sentini Ceramica unit in Andhra Pradesh.
"It is common that the established industries do not take kindly to the emergence of new entrepreneurs/enterprises for obvious reasons, more so when the emerging entrepreneur is a former employee. This also seems to be a major reason for the misinformation campaign against Sentini Ceramica. The basic idea behind this campaign undertaken appears to be to stall the progress of the project implementation which is currently advancing at a brisk pace," the release stated.
"The co- promoter, H&R Johnson, with its rich experience spanning five decades in setting up similar plants across the country, has provided all the other vital inputs like technical know-how, technological/project reports and R&D support. With such a strong and established partner/promoter, Sentini Ceramica does not need any other sources for these requirements," the release added.
