The Hindu Business Line : BIFR directs Enchante to iron out issues with SBI

IS branded gold and diamond jewellery maker, Enchante Jewellery Ltd (EJL), losing its sparkle? The company, which was declared sick almost a year ago, seems to be finding it difficult to convince secured creditors about its resourcefulness. The company, initially incorporated and registered as Mehrasons Jewellery & Gems Ltd (MSJGL), had, subsequently, changed its name to EJL in October 1996.

According to market sources, EJL's jewellery brand, Enchante, has been consistently losing out to other branded jewellery players such as Tanishq, Gili and Carbon over the past couple of years. "EJL did not do enough to promote the brand. Though Enchante is technically still available in the market through a few company outlets, it has not made any headway in sales. Besides, financial troubles have plagued the company," industry sources said. Despite repeated attempts, Mr Chand Mehra, Director, EJL, did not speak to Business Line.

Meanwhile, the Board for Industrial and Financial Reconstruction (BIFR) has directed the company to sort out all the ticklish issues with State Bank of India (SBI), the operating agency (OA), and submit a fully tied-up rehabilitation proposal within a stipulated time frame. "Failing which, the Board would take further measures as per law for the revival of the company," it said.

SBI has also been directed to examine the rehabilitation proposal submitted by the company, if any, in a joint meeting of all parties concerned. At a recent hearing, the BIFR Bench noted, that the company has submitted a one-time settlement (OTS) proposal to SBI in July 2002. The bank, however, is yet to give its final response in the matter despite the company having deposited Rs 40 lakh in a no-lien account.

Besides, the company has identified a co-promoter who would bring in the necessary funds for revival of EJL and would also satisfy the OA on its resourcefulness, the Bench noted.

At the hearing, Mr Mehra had submitted that SBI was the only secured creditor of the company. Meanwhile, the bank in its submissions said that the company has not given any rehabilitation proposal and SBI had already conveyed its rejection of the OTS offer made by EJL to the company.

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