Acceptance of Failure

If one has to come out of a failure, then the most challenging side is to accept the failure and accept the situation that I have failed.

The Journey of Transition: From Business Mogul to Entrepreneur

Once that acceptance is done, half the job is done, as most of us take much time to accept that we have failed. The world felt like it had crumbled beneath my feet. Su-kam, the company I’d nurtured for over three decades, had fallen into the abyss of bankruptcy. It was more than just a business loss; it was a personal identity crisis. For years, I’d been known as “the Su-kam guy.” People saved my number under that label. Without it, who was I?  It took over a year to accept this failure as a fact of life. Once I accepted this failure in my mind and in front of the world, my new life started afresh.

From Business Mogul to Entrepreneur: A Second Chance

Next is to get in the mode of a New Idea:

The initial shock was paralyzing. I was adrift, a ghost in the world I had once dominated. The luxuries I had grown accustomed to—the chauffeur, the extravagant dinners—were suddenly distant memories. I had to learn to cook, order my own groceries, and navigate public transport. The transition was humbling but also a necessary step towards healing.

The Journey of Transition: From Business Mogul to Entrepreneur

As I adjusted to my new reality, I started seeing opportunities. The solitude forced upon me was a blessing in disguise. Without the constant distractions of meetings and phone calls, I had the time to reflect, learn, and grow. I delved into digital marketing, taught myself WordPress, and even rediscovered a long-lost passion for cooking.

While sifting through old files one day, I stumbled upon a notebook filled with product ideas and sketches. It was a time capsule from a different era, a reminder of my entrepreneurial spirit. Inspired, I began exploring these ideas, refining and adapting them to the changing market.

The process of developing new products was challenging but also exhilarating. I faced countless obstacles, from securing funding to navigating the complex patent application process. But with each hurdle I overcame, my confidence grew. I learned to embrace the unknown and to see failure not as a dead end but as a stepping stone towards something greater.

During this time, I realized the importance of community and support. I contacted old friends and colleagues, sharing my story and seeking their advice. Some offered financial assistance, while others provided emotional support. Their kindness and generosity were a lifeline during a difficult time.

As I continued to work on my new ventures, I began to feel a sense of purpose returning to my life. The loss of Su-kam had been devastating, but it had also forced me to confront my fears and limitations. In the end, it was this journey of self-discovery that led me to a new beginning.

Next is to ask for Help.

As I navigated the treacherous waters of bankruptcy, I realized I couldn’t do it alone. The weight of legal battles and mounting expenses was becoming overwhelming. With a heavy heart, I reached out to my friends and family, sharing my struggles openly.

Their response was overwhelming. They offered words of encouragement, financial support, and valuable advice. Some suggested new lawyers, while others connected me with potential investors. The emotional support I received was invaluable. It reminded me that I wasn’t alone in this fight.

Of course, not everyone responded the way I hoped. A few friends seemed distant, their calls going unanswered. Initially, I interpreted this as rejection, a sign that they were distancing themselves from me in my time of need. But as the days turned into weeks, I realized that my fears were clouding my judgment. Many of those who seemed aloof eventually reached out, offering support.

It was a humbling experience, but it also taught me a valuable lesson about human nature. When facing adversity, it’s easy to become consumed by self-doubt and see rejection where it doesn’t exist. By acknowledging my biases and seeking help from those around me, I overcame these challenges and found the strength to rebuild my life.

Unraveling the Su-Kam Saga: A Detailed Look at the IBC

Why are Fair Value and Liquidation Value Determined under the IBC?

The Insolvency and Bankruptcy Code (IBC) of India mandates the determination of Fair Value and Liquidation Value for a comprehensive understanding. This article, Su-Kam Saga: A Case for Rethinking the IBC Explained, delves into the intricacies involved. Unraveling the Su-Kam Saga: A Detailed Look at the IBC

corporate debtor undergoing insolvency proceedings.

https://lithiuminverter.in/inverter/the-rise-of-india-as-the-export-hub-for-lithium-inverters/

Unraveling the Su-Kam Saga: A Detailed Look at the IBC

These values serve several crucial purposes:   

1. Informed Decision Making:
   • Creditors: The fair value provides creditors with a benchmark to assess the viability of potential resolution plans and determine the appropriate level of recovery.
   • Resolution Applicants: Knowing the fair value helps potential buyers evaluate the asset’s worth and structure their bids accordingly.
2. Transparency and Accountability:
   • Determining fair value and liquidation value ensures transparency and accountability in the insolvency proceedings. It prevents undervaluation or overvaluation of assets, safeguarding the interests of all stakeholders.
3. Valuation Benchmark:
   • The fair value and liquidation value serve as a benchmark for comparing with the resolution plan’s offer price. If the offer price is significantly below the fair value, it raises concerns about the resolution plan’s adequacy.
4. Efficient Resource Allocation:
   • By determining the fair value, the IBC facilitates the efficient allocation of resources. It helps ensure that the assets are sold at their actual market value, maximizing the recovery for creditors.
   • Now, here is a catch: If the valuation is done without the knowledge of a promoter, then why not link the promoter and COC based on the Fair value first? If the company is running, then only one can get a fair valuation of the company.

Unraveling the Su-Kam Saga: A Detailed Look at the IBC

The balance between the Promoter Guarantor and the Creditors needs to be balanced. In most cases, the promoter is the personal guarantor of the Corporate debtor, and he is the one who is going to get the brunt of the Insolvency proceedings. First, his company will be taken, and then his personal assets will be taken for the personal guarantee. COC has no responsibility for the fair valuation as they can sell the company to the 1% of the fair valuation as there is no answerability on the part of the COC and promoter after giving the company and his life earnings have no role to play. He can only sit in one corner and see his company, which he built with sweat and blood, ruined before him. The banks make him a willful defaulter and fraud without any basis. Creditors are free from any responsibility as the promoter can not bid for his own company under sec 29A, and the COC can sell the company at any value, no questions asked. Was this the legislature’s intent when defining the IBC Law? I feel the Lawmakers need to interfere here and amend the law by making the valuation process a basis for the Promoter’s integrity or conduct. He should be responsible for paying the balance amount as the personal guarantee after using the fair value as the fair value, although done without his knowledge, should benefit the promoter as he was responsible for creating that much value when the company was taken under the NCLT. I provide an example of Su-kam, which used to be owned by me and was taken over by the COC and RP in April 2018. The moment they took over the company, which was a running company doing 500 CR revenue, and had they done a fair valuation, the company would not have been more than 500 Cr then. But they did the valuation and got two valuations, which were nearly 300 Cr. Now, they ran the company for one year, took further credit from the market, and closed down the company after one year. After closing the company, they kept making legal and other management expenses, did not give the money to the security agencies, deposited the electricity bill for locations in different areas and had a lot of thefts on all the premises. Under the approval of COC, the liquidator sells the company in the Corona period, and the banks get a mere 8 Cr. What kind of a system is this? I was ready to give 250 Cr with the help of the Kotak bank, and they wanted to punish me for that. But what a loss and shame for the nation that the company is sold at a mere 49 Cr. Employees lost their jobs, The suppliers lost money, and two of the suppliers went to the NCLT because of the fall of Su-kam. Dealers and distributors saw the brunt as there was no service support. Customers were left crying as the liquidator ensured no communication number was left in working condition and no person was left to take the calls and tell them the truth. All the market knows is that the company was closed by Mr Kunwer Sachdev as he was the owner, and all the calls got diverted to my mobile number with a lot of anguish from dealers and customers. One can imagine that in one day, there used to be 700 calls for the service, and all these calls were stopped. If the company was destroyed at this level, who would be responsible? Who benefits from this situation? The liquidator and the new buyer of Su-kam. Who acquired properties worth 300 Crore and the brand of Su-kam free of cost, and COC, which was the supreme power, let this happen. But now, if this has happened and the promoter has suffered. The promoter has to go through the personal insolvency process as he will be humiliated again in the newspapers and take all the properties left in his name. The story does not end here as the next is the Promoter having an avoidance application going on in the NCLT, which is now taken over by the new owners of Su-kam, who got the knife in their hand to cut the promoter. COC comes after the promoter’s assets under personal insolvency. The CBI cases and ED cases will never be stopped. So, the outcome of this IBC law is the destruction of entrepreneurship in India. The next generations who have seen things happening to us dare not take risks in life and play the safe game. The tale of Su-Kam is a cautionary one. It highlights the challenges promoters face in the maelstrom of insolvency proceedings. It raises questions about the balance between protecting creditors’ interests and ensuring fair treatment for promoters. And it underscores the need for a more nuanced approach to insolvency, one that considers the broader implications of corporate failures and their impact on individuals and communities.

Unraveling the Su-Kam Saga: A Detailed Look at the IBC

Unraveling the Su-Kam Saga: A Detailed Look at the IBC. This blog offers insight into the intricate details surrounding the Su-Kam saga, providing a detailed look into the IBC process.

News of Business Standard newspaper on IBBI guidelines

Understanding the Rushed IBBI Guidelines for COC is crucial when navigating the complexities of insolvency resolution in India. To fully comprehend the im

plications, it is crucial to focus on understanding the rushed IBBI guidelines for COC.

y-not-be-effective-experts-124082300872_1.html”>Ibbi guidelines for CoC need monitoring mechanism, say IBC experts | Finance News – Business Standard (business-standard.com)

Key Points:

• The focus is on understanding the recently issued IBBI guidelines for COCs, which some experts believe were rushed.
• A recent High Court case raised questions about a COC’s decision to sell a company at a significantly lower price than its fair value.
• The case also points out how the COC, while managing the company during insolvency, may not be held accountable for maintaining its fair value.
• The author questions the purpose of fair value assessments if the promoter (company owner) doesn’t benefit and the COC isn’t responsible for maintaining it.

Additional Information:

• The passage defines “fair value” according to the CIRP (Corporate Insolvency Resolution Process) Regulations.

The major point that came out from this High Court judgement was that the COC sold the company at a price which is un imaginable to the people as the fair value of the company was 300 Cr, and after taking over the company, the COC, which was deciding every move of the company what responsibility they have to intact the fair value. As the company was running at the time of going to NCLT, the RP and COC ran it for one year and created a debt of more than 40 Cr before closing it for two years to wash off the responsibility. The company was sold in the Corona period by the Liquidator and COC when the whole world was in a state of shock, and there was no emergency as the company had already been closed for more than two years. The company was closed, and the money in the account was used for legal fees and other expenses rather than keeping the service small call centre or email accounts. There was no one to listen to the Su-kam customers, dealers, employees and vendors, and the promoter was left with all these responsibilities of attending such calls to have the brunt of his failure this way also.

Guidance of valuation

So here, the law point is: Why have fair value at all? Why burden the already sick company with two reputed valuers when no one will give a dam to that report? If the promoter does not get absolved based on his company’s fair valuation and COC is not responsible for taking care of Fair valuation, then what is the need to waste money? That’s my point of view.

Fair Value: Regulation 2(hb) of CIRP Regulations defines Fair Value as “estimated realizable
value of the assets of the corporate debtor if they were to be exchanged on the insolvency
commencement date between a willing buyer and a willing seller in an arm’s length
transaction, after proper marketing and where the parties had acted knowledgeably,
prudently and without compulsion”.

Inverter – Fairy

Building upon the resounding success of the Chic inverter, Su-kam embarked on another ambitious project: the FairyQueen. This unique inverter, designed to resemble a locomotive engine, was envisioned as a stylish and functional addition to homes, particularly bedrooms.

The FairyQueen’s innovative design and aesthetic appeal were undeniable. Its resemblance to a locomotive engine added a touch of whimsy and nostalgia, making it a standout product. However, despite extensive testing and validation, FairyQueen’s launch was marred by a critical oversight: packaging issues.

The packaging for the FairyQueen proved inadequate, resulting in damaged products upon arrival. This unfortunate mishap shattered the innovative design’s initial positive impression, plummeted customer confidence, and derailed FairyQueen’s success.

The FairyQueen’s failure was a stark reminder of the importance of meticulous attention to detail, even in the face of success. A seemingly minor oversight in packaging can have far-reaching consequences, undermining the hard work and innovation that goes into product development.   

While the FairyQueen’s innovative design and aesthetic appeal were undeniable, the packaging flaw proved insurmountable. The model’s failure was a setback, but it also offered valuable lessons about risk management and the critical role of packaging in product success.   

Su-kam learned from this experience, recognizing the need to invest in robust packaging solutions to protect their products during shipping and handling. This setback catalyzed improvements in their quality control processes, ensuring that future products would be delivered to customers in pristine condition.

Despite the challenges faced by the FairyQueen, Su-kam’s commitment to innovation and product excellence remained unwavering. The company continued to push the boundaries of inverter technology, introducing new models and features that catered to evolving customer needs. The lessons learned from the FairyQueen’s failure served as a valuable foundation for future successes.

A Spark Ignites: Behind the Scenes at Su-Kam Manufacturing

I’ve always been a voracious reader, and books  have played a pivotal role in shaping my journey. One particular book, read around 2001 or 2002, left an indelible mark on me: Made in Japan by Akio Morita.A Spark Ignites: Behind the Scenes at Su-Kam Manufacturing
At the time, I was embarking on my entrepreneurial journey and starting to manufacture products. The prevailing sentiment was that exporting Indian goods was a daunting task. But Made in Japan offered a different perspective. It chronicled how Japan, once a nation in ruins, rose to become a global manufacturing powerhouse, largely thanks to the vision and determination of individuals like Akio Morita.

http://lithiuminverter.in/inverter/the-rise-of-india-as-the-export-hub-for-lithium-inverters/
I was captivated by Morito’s story. He envisioned creating Sony products and selling them worldwide, even when faced with overwhelming odds. This book, which I read three times, taught me that the thought process is paramount. It’s about having a clear vision and holding onto it, even when faced with challenges.

A Spark Ignites: Behind the Scenes at Su-Kam Manufacturing
Inspired by Morito’s example, I began to question why I couldn’t create a successful brand and innovative products in the inverter UPS field. Su-Kam was born out of this belief. While I was motivated by various books at different stages of my journey, Made in Japan was a particularly influential force in shaping my manufacturing, branding, and export strategies.
In those days, access to books was limited, and digital versions were nonexistent. I had to physically visit bookstores or libraries to find the books I wanted. This added a layer of challenge and appreciation for the written word.
Made in Japan was more than just a book; it was a catalyst that ignited a spark within me. It provided the inspiration and the belief that I could achieve extraordinary things.

• By Kunwer Sachdev, Founder of Su-Kam