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Tuesday, May 07, 2002

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Fallout of `recast' plan -- Manipal unit depositors form body

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A section of the depositors of the Maha Rashtra Apex Corporation has formed an association to try and ensure that it gets its money back. The association was formally launched here on Monday at a meeting that was attended by about 150 depositors.

This follows the Manipal group's decision to "restructure" its subsidiaries - Maha Rashtra Apex Corporation, Canara Nidhi and Manipal Home Finance. The Manipal group has, in fact, sought the Karnataka High Court's approval for a restructuring package and repayment schedule for all these companies.

Addressing a press conference here, representatives of the newly-formed Maha Rashtra Apex Tevanidarara Sangha - formed out of "humanitarian interest" under the aegis of the local unit of the Yuva Janata Dal and a few "social workers" -- said that a meeting of all the depositors from the Dakshina Kannada and Udupi districts of Karnataka would be convened here on May 12 to chart out their future course of action.

As of now, the depositors plan to organise a jatha on May 16 followed by a dharna, after which a memorandum would be submitted to the Deputy Commissioner of Dakshina Kannada. The depositors also plan to seek the intervention of the State government to find a way out of the current impasse.

If, however, a solution was not found within 10 days the depositors intend to intensify their agitation and also plan to file a writ petition against the company. A group of lawyers is currently working out the details of the petition, according to the association.

The company, on its part has been trying to assure depositors of its intention to repay their money and has been saying that in addition to a cash payment of 20 per cent, depositors/bond-holders will receive shares in another group company -- Kurlon -- to the extent of 15 per cent, a proposal which has not found much favour with the investors.

(The depositors here, for instance, are demanding an immediate cash payment of 50 per cent). For the remaining 65 per cent, fresh zero interest fully secured asset recovery bonds will be issued by Maha Rashtra Apex Asset Management Company Ltd (Mamco).

Mamco will receive from Maha Rashtra Apex assets worth Rs. 300 crore in the form of receivables and the total value of the asset recovery bonds will be around Rs. 190 crore. Mamco is to be a company concentrating on the `aggressive recovery' of receivables and the entire amount recovered each year will be distributed among the depositors/bond-holders.

The `scheme of arrangement' for Canara Nidhi is also planned along similar lines. Manipal Home Finance too is to be similarly "restructured" and recovery of outstandings and repayment of deposits/bonds will be their "first priority", according to the promoters.

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