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BIFR talks tough in Telengana Paper case

Richa Mishra

The Bench took strong objection to the fact that the company had neither submitted its audited balance sheet as on March 31, 1998, 1999 and 2000 nor the provisional/ audited balance sheet for 2000-01.

NEW DELHI, June 24

THE Board for Industrial and Financial Reconstruction (BIFR) has directed the Telengana Paper Mills Ltd (TPML) to submit the audited balance sheet of Raasi Cements Ltd (RCL) for 1997-98 and those of India Cements Ltd (ICL) for 1999-2000 and 2000-01.

On receipt of the balance sheets from the company, the monitoring agency (MA), IDBI, is to submit its report to the board.

"Based on this, the board may consider discharge of the company out of BIFR purview, if its net worth is now positive,'' the order said.

The Bench recalled that a merger-cum-rehabilitation scheme for TPML was sanctioned in March 1996 envisaging benefits under Section 72A of Income-Tax Act and one-time settlement (OTS) of institutional dues.

The instant hearing was held to consider, inter alia, compliance of the directions of the last review hearing of July 2001 and discharge the company out of BIFR's purview.

At the beginning of the hearing, the Bench took strong objection to the fact that the company had neither submitted its audited balance sheet as on March 31, 1998, 1999 and 2000 nor the provisional/ audited balance sheet for 2000-01. Besides, IDBI had also not submitted any status report.

The Bench said that its directions were judicially binding on the concerned parties, who might also be prosecuted under Section 33 of Sick Industrial Companies (Special Provisions) Act, 1985 for non-compliance of the same without good and sufficient reasons.

The company representative, at the recent hearing, submitted that the merger of TPML with RCL became effective from March 31, 1997 and after that date, TPML had lost its existence.

Further, RCL was also subsequently subsumed in another company, India Cements Ltd (ICL), with effect from June 20, 1998 in terms of Andhra Pradesh High Court order dated October 7, 1999.

While enquiring as to why this fact was not brought to the board's notice in the last hearing of July 2001, the BIFR Bench directed the company to submit the High Court order by which RCL was reported to have been subsumed in ICL.

Further, the company was also directed to indicate the exact amount of benefit availed by it under Section 72 A of the Income-Tax Act and also whether the assessment for the relevant years had been completed and the said benefits granted to the company.

If not, reasons thereof should also be communicated, it said.

The board has exempted Andhra Bank from attending future hearings, if any, in the case as its dues have been cleared by the company.

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