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MCC Finance directors held

Our Bureau

CHENNAI, Sept. 13

Mr A.L. Vadivelu, Chairman, MCC Finance, and Mr Jawahar Vadivelu, Director, have been arrested by the Economic Offences Wing (EOW) - II of the Tamil Nadu Police under Sections 409 (banker deceiving others), 420 (cheating), 120 (B) (conspiracy) of the IPC , according to a police press release. They were arrested on September 12 and remanded to 15 days judicial custody.

According to Mr A.G.Mourya, Superintendent of Police, EOW II, MCC Finance had defaulted on payments to fixed deposit holders to the tune of Rs 300 crore and that the assets recoverable as on date were only Rs 60 crore. He said the investigations were con tinuing to trace the balance of Rs 240 crore.

The Madras High Court had appointed a Provisional Liquidator for MCC Finance based on a winding-up petition filed by the Reserve Bank of India on September 12.

MCC Finance had defaulted on repayments to fixed deposit holders and the Company Law Board (CLB) had passed orders in July 1999 asking the MCC management to repay fixed depositors by way of a repayment schedule. The beleaguered finance company had also n ot complied with the schedule as laid down by the CLB.

The default amount as at March 1997 was being pegged at Rs 211 crore.