Date:06/05/2005 URL: http://www.thehindubusinessline.com/2005/05/06/stories/2005050601530200.htm

Back CLB dismisses Govt petition against CRB Resources

Richa Mishra

New Delhi , May 5

CRB Resources Private Ltd, part of the CRB Group of companies controlled and managed by Mr C.R. Bansali and his family, has got some respite with the Company Law Board (CLB) dismissing the petition filed by the Central Government alleging mismanagement in the affairs of the company.

The CLB Principal Bench, comprising Mr S. Balasubramanian, Chairman, observed that the entire foundation of the petition was on the basis of actions taken by statutory authorities against CRB Capital Market Ltd, which are pending in other fora.

As far as allegations against CRB Resources are concerned, the Bench noted that, "They are not substantive in nature warranting any order in terms of Section 397/398 of the Companies Act, and as a matter of fact, even the Central Government has not sought any substantive order or direction other than an observation that the affairs of the company are not being carried out in public interest."

The Government had sought directions to the company for preventing it from conducting its affairs in a manner prejudicial to the public interest.

CRB Resources is a closely held private limited company with an issued paid-up capital of Rs 2.48 lakh. Of the total unsecured loan of about Rs 75 lakh as on March 31, 1997, about Rs 59 lakh was from shareholders. The fixed assets amount to about Rs 8 lakh and there were no secured loans, the bench noted adding that "this would indicate that no public interest is involved."

Further, the directors' report of the company for 2002-03 stated that CRB Resources had not been carrying on any business from May 15, 1997. "Thus, on overall assessments of the facts of the case, I do not find scope to pass any order," the CLB Chairman said in the order.

The petition of the Ministry of Company Affairs had said that as per the RBI Report, Mr Bansali or persons acting in accordance with his instruction were operating bank accounts of 14 CRB Group companies and in this manner funds of these companies were diverted. One such company was CRB Resources, managed by relatives of Mr Bansali, the petition said. It had total investment of Rs 204.44 lakh in shares of other companies. The company has not taken any efforts to realise its debts.

It was also stated that even though the company had collected a sum of Rs 119.50 lakh as share application money, shares had not been allotted indicating mismanagement. The company had also failed to deposit Rs 1.65 lakh as tax deducted at sources.