Leaving the investors of his company high and dry, Sammidi Sreekanth Reddy, Sagarsoft's chairman and managing director, has decided to join as a director of Hyderabad-based Sagar Cements, which was promoted by his father, with a hefty pay package which amounts to over Rs 150,000 per month in salary in addition to a commission of two per cent of net profit.

Sagar Cements will seek the approval of its shareholders at its annual general meeting on September 27 in Hyderabad for Reddy's appointment.

Ironically, though Reddy decided to join the cement company as director (technical), which is in all probability a full-time job, the latest annual report of Sagarsoft did not make any reference to Reddy's move.

Instead, the report tries to be optimistic about the growth prospects of the company in future. If one goes by the financial performance of the company, it had apparently not made any effort to improve its business prospects, and suffered huge losses.

The company posted a net loss of Rs 2.37 crore (Rs 23.7 million) on a minuscule turnover of Rs 22 lakh (Rs 2.2 million) for the year ended March 2003.

The company does not seem to have a single employee on its rolls as it had reported zero expenditure on salaries account for the last fiscal.

But the annual report promises that the company seeks to attract, motivate and retain its professionals by offering the ability to work with leading-edge technologies.

One wonders how the company could retain the employees without a single person on the rolls.

The company incurred an expenditure of Rs 1.76 crore (Rs 17.6 million) last fiscal, primarily on account of Rs 60 lakh (Rs 6 million) worth bad debts written-off, Rs 90 lakh (Rs 9 million) on account of loss on sale of fixed assets and Rs 15 lakh (Rs 1.5 million) arising out of foreign exchange fluctuation reserve.

Sagarsoft hit the capital market with its IPO in June 2000 at a premium of Rs 20 per share and raised Rs 2.78 crore (Rs 27.8 million). Its share price touched Rs 85 at its peak and is now not traded at all.

With the promoter himself deciding to set his sights elsewhere, investors of the company can better write-off their investments.