Financial Daily from THE HINDU group of publications
Tuesday, Dec 03, 2002
Financial Daily from THE HINDU group of publications Tuesday, Dec 03, 2002 |
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Non-Performing Assets Money & Banking - Non-Performing Assets ICICI Bank, others take over assets of Patheja group Our Bureau
MUMBAI, Dec. 2 IT appears empowerment is all that lenders needed to set out against rogue borrowers. Close on the heels of taking over assets of the Ahmedabad-based Mardia Chemicals for non-repayment of loans, banks led by ICICI Bank have taken over the assets, including personal property, of the Patheja group of companies under the asset securitisation law. The personal property of the promoters includes residential flats in various places such as Mumbai, Pune, Thane and Bangalore. The Pune-based group, comprising mainly Patheja Forgings and Autoparts Manufacturers Ltd (PFL) and Patheja Brothers Forgings and Stampings Ltd (PBL), owes financial institutions and banks more than Rs 1,200 crore in principal and interest. Officials with lending institutions said PFL owes Rs 230 crore and PBL owes Rs 375 crore in principal alone. For the past five years, the lenders' attempts to recover their money have been frustrated by the Pathejas, who successfully took the cover of the Board for Industrial and Financial Reconstruction (BIFR) in 1998, they said. The group was embroiled in controversy last December when the Bank Securities and Fraud Cell of the Central Bureau of Investigation arrested Mr Paramjeet Singh Patheja, Director of PBL and PFL, and son of the promoter, Mr Mansingh Patheja, for allegedly cheating Bank of India of $29 million. The CBI investigation had revealed that Mr Paramjeet Patheja had misappropriated more than Rs 100 crore through PFL and PBL, according to a CBI release dated December 26, 2001. According to lender sources, in April this year, Mr Mansingh Patheja and his son, Mr Gurvinder Singh Patheja, were also arrested on criminal charges levelled by ICICI Bank. They also said the Chief Metropolitan Magistrate has now again issued arrest warrants against the two for non-compliance of its previous orders. Promoted in 1968, Patheja Forgings was an award-winning exporter in 1992, when it went public. At one time, the company was the largest supplier of connecting rods to the two-wheeler industry and counted Bajaj and Premier among its top clients. However, the lender sources said, the company fell into bad times due to gross mismanagement and diversion of funds by the promoters. As soon as the Government passed the Securitisation Ordinance, lenders had issued notice to the company, and now, following the expiry of the two-month notice period, have taken possession of the assets.
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