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ICICI to advertise for change of brass for Madras Petrochem

Richa Mishra

NEW DELHI, June 20

THE Board for Industrial and Financial Reconstruction (BIFR) has declared the second sanctioned rehabilitation scheme, 1996, of Madras Petrochem Ltd (MPL) as failed and has directed ICICI to advertise for change of management.

The Bench noted that, as per the sanctioned scheme, the net worth of the company was required to become positive by 1995-96 and the accumulated losses were to be wiped out by 1997-98. However, none of these targets have been met whereas the outstanding d ues of the banks, financial institutions (FIs) and workers have been mounting. In view of this, the Bench declared the sanctioned rehabilitation scheme as failed and directed ICICI to advertise for change of management, the Board said.

MPL has been directed to negotiate one-time settlement (OTS) proposals, if any, with the banks and FIs and also to settle the dues of workers and employees of the company. The company is to submit its proposal to ICICI, the monitoring agency (MA), in res ponse to the advertisement for change of management.

For the purpose of issuing the advertisement for change of management, MPL has been directed to submit all the relevant documents including its audited balance-sheet as on March 31, 1999 to the MA, the Board said. These details will include, inter alia, the list of fixed assets of the company, with their book values as on March 31, 2000, and details of liabilities of the company including secured creditors, unsecured creditors, workers dues, Government and statutory dues and contingent liabilities, if a ny.

The banks and the FIs were directed to communicate the position of their overdues as on March 31, 2000 to the MA. Further, the Bench has also directed the Employees Provident Fund (EPF) and ESIC organisations as well as workers unions' to pursue their le gal claims pertaining to employees contribution towards provident fund (PF) and ESI in the appropriate courts of law. The restriction in this regard under Section 22(1) of SICA was removed by the Bench.

ICICI has been asked to issue the desired advertisement for change of management within 45 days from May 16, giving a statutory period of 60 days for submitting objections and suggestions to the proposal. The MA will then submit its report to the Board.

The acceptability of any further revival proposal based on OTS that may be submitted by the existing promoters with or without a co-promoter can also be examined at the joint meeting held by MA.

A rehabilitation scheme for MPL was sanctioned in July 1991 involving takeover of management by Mahavir Plantation Ltd. However, the scheme could not take off and another rehabilitation scheme was sanctioned by the Board in April 1996.

The recent hearing was held to review the implementation of the second rehabilitation scheme and to consider reply of the company to the Board's show-cause notice of January 14.

The Bench expressed its unhappiness on the fact that the company has been with the BIFR since 1989 and in spite of two rehabilitation schemes, it has not turned around so far.