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UNITED STATES BANKRUPTCY COURTNORTHERN DISTRICT OF ILLINOISEASTERN DIVISION

In re ) Chapter 11) Jointly AdministeredXECHEM, INC., )) Case No 08-30513Debtor. )) Hon. Jack B. Schmetterer

OBJECTION

DR.

RAMESH

PANDEYTO

THE

APPLICATION

RETAIN

BASU

CAPITAL

Dr. Ramesh Pandey, a party in interest in the captioned cases, hereby objects to theApplication of the Official Committee of Unsecured Creditors of Xechem, Inc.,

et al

., to Retainand Employ Basu Capital LLC as Capital Finder (the “

Application

”) as follows:

INTRODUCTION

Basu Capital should not be retained as a professional in these cases. Basu Capital doesnot satisfy the statutory requirements of Section 327(a) because it is a creditor in these cases andhas not agreed to unconditionally waive its prepetition claim against the estates.Even if Basu Capital waives its prepetition claim, it is questionable whether Basu Capitalcan even meet the statutory requirements of Section 327(a) given its connections with certainundisclosed creditors and bondholders, as well as Robert Swift, an insider charged with, amongother things, breaching his fiduciary duties to the Debtors. At the very minimum, Basu Capitalshould be required to make further disclosures before it is retained as a professional in thesecases.Finally, the information provided in the Application raises questions about whether BasuCapital already has investors lined up and whether Basu Capital actually hopes to acquire a

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2substantial interest in the reorganized Xechem. Answers to these questions are material todetermining whether Basu Capital should be retained as a professional and compensated as aprofessional. In other words, additional information is needed to determine whether theApplication merely represents a vehicle to transfer value to Basu Capital for past efforts (

e.g.

, asa means to indirectly pay its claim) or instead represents an effort to provide Basu Capital aneconomic incentive to identify and obtain as yet unknown sources of capital.

THE FACTS

Shekhar Basu is the President of Basu Capital, a New York limited liability company.On information and belief, Mr. Basu is also the owner of Basu Capital and fully controls BasuCapital. Therefore there is no material distinction between Mr. Basu and Basu Capital forpurposes of the Application.Mr. Basu filed a proof of claim against the Xechem International estate for $262,800, inwhich he alleges:Commencing in July of 2007, upon the instructions of RobertSwift, COO of the Debtor, Claimant accepted the assignment totravel to India to conduct an investigation concerning theoperations of Xechem (India) PVT, Ltd., to determine the currentstatus of the business, what was required and to potentially shutdown operations or make other recommendations. . . .With theauthority of the Board of Directors and management, I begansearching for and interviewing appropriate local Indian law firmsand ultimately recommended an Indian law firm that was highlyrecommended to me. This required also daily supervision,conference calls between the law firms in India and the Company’sBoard of Directors. During the course of my investigation, Iuncovered the fact that the Company’s alleged 67 percentownership of the alleged Indian subsidiary was not registeredaccording to Indian law creating a major problem. I alsouncovered the fact that funds and equipment may have beendiverted from their intended use.

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3As part of this investigation, I was also in constant contact withattorneys in Chicago in coordinating their activities with the Indianlawyer. Upon facts uncovered by me, the Company had meengage attorneys on behalf of the Company. The suit was filed inSeptember 2007 and I attended, at the instructions of theCompany’s COO, hearings at the Indian High Court in New Delhi.In fact, Mr. Basu and Basu Capital were not retained by Xechem International to travel toIndia on behalf of the company and the Board of Directors did not sanction Mr. Basu’s actions inthis regard. Mr. Basu traveled to India to further his own interests, and he was interfering in themanagement of the company. This is why Mr. Basu and Basu Capital were not compensated inconnection with Mr. Basu’s activities in India.To the extent Mr. Basu was taking directions from anyone at the company, it was RobertSwift. Mr. Swift, however, has been charged by the Committee with self dealing in violation of his duties to the Debtors. As a result of Mr. Swift’s actions, the Committee sought and wasgranted derivative standing to pursue legal action against Mr. Swift and those acting in concertwith him.

THE APPLICATON

In the Application, Basu Capital seeks to be retained on a contingency basis with BasuCapital to be paid 10% of aggregate gross proceeds raised from new investors (“

New Investors

”)introduced to the Debtor by Basu Capital and 5% of any investments by an existing stockholderor creditor of the debtors or their affiliates (“

Current Investors

”). With regard to CurrentInvestors, it is proposed that Basu Capital receive the 5% commission even if it has absolutelynothing to do with the Current Investor’s decision to invest in reorganized Xechem. In addition,if Basu Capital raises in excess of $2 million, it will be entitled to five-year warrants to purchasea substantial amount of shares in the reorganized Xechem based upon the “pre-money valuation”

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