Financial Daily from THE HINDU group of publications
Tuesday, Dec 10, 2002
Financial Daily from THE HINDU group of publications Tuesday, Dec 10, 2002 |
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Corporate
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Sick Units Money & Banking - Non-Performing Assets Respond to creditors' query, BIFR tells Mardia Chem Richa Mishra
NEW DELHI, Dec. 9 THE Board for Industrial and Financial Reconstruction (BIFR) has directed Mardia Chemicals Ltd (MCL) to submit its response on the request made by certain secured creditors that advertisements be issued for change in management if MCL were to be declared "sick" by the Board. At the recent hearing, the bench noted that some of the secured creditors had stated that the net worth of MCL was eroded by more than Rs 700 crore and even if all the losses, on account of objections raised, were disallowed, the net worth of the company was fully eroded. The secured creditors requested that in case the company was declared sick, further measures including change in management be taken for its revival or company be wound up, especially as they had lost faith in the company. Considering the facts of the case, the bench noted that both Union Bank of India (UBI) and UTI have objected to the company being declared sick. Further, UBI had sought time to submit their written submissions in the matter. The bench directed UTI and UBI to submit their objections within a stipulated time frame. Further, in the cases where the Appellate Authority of Industrial and Financial Reconstruction (AAIFR) had permitted banks and institutions under Section 22(1) of the Sick Industrial Companies (Special Provisions) Act (SICA), 1985 for continuation of the recovery suit already filed by them, the bench said that, no fresh permission was required just because the company had filed a fresh reference. Meanwhile, all the other secured creditors, who had sought permission of the bench under Section 22(1) of SICA, would file their formal applications seeking permission of the bench to initiate or continue recovery proceedings already initiated by them, the bench said.
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