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IDBI told to attach JK Leatherite properties

Richa Mishra

NEW DELHI, June 17

INDUSTRIAL Development Bank of India (IDBI) has been directed by the Board for Industrial and Financial Reconstruction (BIFR) to take into custody the properties of J.K. Leatherite Ltd (JKL).

Given the non-cooperative attitude of the company/promoters, it may not be possible for any incoming promoters to formulate a rehabilitation scheme due to lack of access to company records.

It was, therefore, considered imperative that the company should be taken over by IDBI, the operating agency (OA), which had expressed its agreement in this regard at the recent hearing, the Bench looking into the issue said.

``In the circumstances, the Bench directed the OA to take into custody or under its control all properties, effects and actionable claims to which JKL was entitled to at the earliest, under the confirmation to the Bench,'' BIFR said.

The Bench also directed that the OA may make a request in writing to the Chief Metropolitan Magistrate or the District Magistrate, within whose jurisdiction any property/books of accounts or other documents of the sick company be situated, or be found, t o extend necessary assistance in terms of the provisions of Section 29 of SICA to enable the OA to take possession thereof.

IDBI had also been directed by BIFR to issue advertisements inviting offers for takeover or leasing or merger for the rehabilitation of JKL, with or without one-time settlement (OTS) of the dues of financial institutions (FIs) and banks.

The current promoters may also submit a fully tied-up comprehensive rehabilitation proposal, indicating clearly the means of finance in response to the advertisement with or without induction of resourceful co-promoter, the Bench said.

In case the proposal was based on settlement of the dues of the secured creditors by way of OTS, it should have the approval of the secured creditors.

Further, the schemes submitted in response to the advertisement may provide for the measures listed in Section 18(2)(i) and 18(11) of SICA.

The cost of the advertisement will initially be borne by IDBI, and subsequently be reimbursed by the company, the Bench added.

IDBI is to furnish to the BIFR the details of offers received in response to the advertisements. In the event of no concrete rehabilitation proposal being received in response to the advertisements, the Bench may consider other alternatives, including is suing a show-cause notice for winding up without holding any further hearing.

The Bench also said ALA Chemicals Ltd had submitted that JKL owed it an amount of Rs. 4.93 lakhs, and that due provisions be made in this regard.BIFR directed the OA to take into account the dues of ALA Chemicals in the scheme formulated by them, after d ue verification. It also directed ALA Chemicals to intimate the exact position of their dues to IDBI.

At the recent hearing, the Bench said that IDBI had submitted that attempts to get in touch with the promoters had not yielded any fruitful results.

The promoters had failed to co-operate with the OA, which was confirmed by their absence at the hearing.

It was obvious that the promoters were not serious about the revival of the company, but were merely interested in continuing to enjoy protection available under SICA and delay the process of revival.