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KSDL directed to submit modified revival scheme

Richa Mishra

NEW DELHI, March 30

KARNATAKA Soaps & Detergents Ltd (KSDL) has been directed by the Board for Industrial and Financial Reconstruction (BIFR) to submit a modified scheme by May 1, to IDBI.

The Bench also said that the modified scheme shall take into consideration the pending dues of the Forest Department and IFCI, as well as the funds to be released from the sale of surplus land.

``The modified scheme shall be submitted by the company within two months. IDBI is to submit its report after three months (June 1),'' the order said. IDBI has been directed to continue to act as the operating agency (OA) as well as the monitoring agency (MA).

The fees of the OA shall be provided in the modified scheme since the dues of IDBI had been paid and it had no exposure in the scheme, the Bench said. The Karnataka Government was to consider providing the required guarantee for continuation of the sanct ioned limits, the Bench noted.

BIFR also directed that there shall be a fixed tenure for the company's board to ensure continuity.

On increased expenditure on advertisement and sales promotion, KSDL has been directed by the board to exercise necessary caution so that the expenditure on these heads are kept within reasonable time.

On a query from the Bench at the recent hearing as to why the company should not be delisted now that its networth has become positive, the company submitted that if it is discharged out of the purview of BIFR, subsidised sandalwood will not be available , which would affect the profit margin of the company.

Further, KSDL has also diversified into cosmetics and agarbathi sector due to depleting sandalwood resources. The company, therefore, wanted to submit a modified scheme taking into consideration all these developments.

In reply to another query from the Bench, the company said the MoU signed with the workers earlier had expired on March 31, 1998 and the new wage agreement had been signed for the period May 1, 1998 to April 30, 2003.

As regards the increased expenditure on advertisement and sales promotion, the company clarified that it was due to launching of new products such as Mysore Sandal Gold, Mysore Sandal Baby Powder and Mysore Sandal Baby Soap.