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Wednesday, Feb 13, 2002

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`Under pressure to waive promoter's guarantee'

M. Ramesh

OFFICIALS of some of the member-banks of the consortium of lenders have told Business Line that they are "under pressure" from their head offices, to waive the personal guarantee of the promoter-director of Apple Credit Corporation, Mr Atul K. Nishar.

In October last year, Mr Nishar wrote to the Joint Secretary, Banking Division, Ministry of Finance, alleging "harassment" from the banks.

"The banks are trying to involve me in the cases claiming to invoke my personal guarantees, which were waived, with respect to loan facilities given to these two companies (Apple Credit Corporation and Apple Finance)," Mr Nishar wrote.

He requested the Joint Secretary to "ask the banks to stop this harassment and refrain from initiating such proceedings against me."

Mr Nishar had also noted that "as per the consortium minutes of December 14, 1995, it was decided by all the banks to waive the personal guarantee of Shri Atul Nishar".

Bank officials, speaking on the condition of anonymity, told Business Line that participants in consortium meetings had no authority to waive personal guarantees. On December 14, 1995, it was only said that the members would take to their boards a proposal to waive the personal guarantees.

The waiver was never given, they said.

Apple Credit's annual reports for subsequent years acknowledge that the "assets are additionally secured by the guarantee of a director". The banks have taken personal guarantee only from Mr Nishar.

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