Back to Square D

If the Interpol has its way, the man who was behind DSQ Software and DSQ Biotech will be behind bars. Those who witnessed the software boom in the mid 90’s and the stock market boom in the late 90’s would definitely remember Dinesh Dalmia. Originally from Calcutta, Dalmia had a big establishment in Chennai. The CBI website also has a list of offences committed by him. Dinesh Dalmia’s website continues to project his laurels and accomplishments. The financial press in India has largely ignored these developments. I haven't seen much coverage about this incident in the last few month(s). (via)

In case you don’t know the logic behind the company name, here is the formula:

Dinesh Dalmia = D^2 = Square D = DSQ

New York Post has more on the same:

Dalmia's journey to this world of masked identities and numbered accounts began in the teeming streets of Calcutta at the start of the 1990s, where he set up an outsourcing body shop they called Square D Software Ltd.

In the decade that followed, Square D Software expanded across Europe and the U.S. until, by the end of the decade, it was racking up revenues that approached $64 million annually — bringing in investors ranging from Bank of America and Merrill Lynch, to Credit Suisse First Boston and the Templeton funds.

Yet neither the investors nor any regulators seemed even the slightest bit concerned as more and more of the company's soaring revenues began sluicing through a multiplying array of Dalmia-owned or controlled "associate" firms.

Nor did they seem to mind that the companies in this bewildering network kept changing their names as the tech boom roared on. In the U.S., a Texas-incorporated entity that Dalmia's Indian operation owned under the name D Square Software Inc., changed its name eight times between 1993 and 2003, but Texas regulators dutifully processed the paperwork without ever asking why.

The name changes for Dalmia's U.S. operations reflected similar activity elsewhere in the network. In Britain, the authorities seemed equally uninterested when Dalmia set up a private company, which he himself controlled, and, began using it to channel business to India. The U.K. company underwent five separate name changes of its own during the period.

Only when the shares of Dalmia's public company in India — by then known as DSQ Software Ltd. — soared a stunning 341% during the first three months of 2000 did Indian authorities at last take notice. In the probe that followed, they wound up uncovering the pump-and-dump scheme as well as four separate offshore shell companies in Mauritius and Tortola that the plot revolved around.

But Dalmia was hardly sitting on his hands, and while the regulators were investigating him, he was busy secretly transferring DSQ's worldwide assets into some of the same offshore shell companies he had used for his pump-and-dump.

In early 2002, Dalmia began negotiations to sell this buried treasure to a Singapore-based outsourcing company called Scandent Group. Founded the year before by an Indian businessman named Ramesh Vangal, Scandent boasted a board of advisers that knew little about the body shop business but whose members had been longtime friends of Vangal. Included among them: the former CEO of Pepsi Cola, Christopher Sinclair; Geier of Interpublic; and Bronfman and father, Edgar Sr., who once employed Vangal as head of Asian operations for the Seagram Co. empire.