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Richa Mishra

The board appointed IDBI as the operating agency (OA) to work out a rehabilitation scheme.

New Delhi , Sept. 6

THE white goods maker, IFB Industries Ltd, has come under the Board for Industrial and Financial Reconstruction (BIFR) fold.

Since there were no valid objections to the company's sickness, in a recent order the bench declared that the company had become sick as on March 31, 2001.

On a query raised from the bench, the representatives of the company indicated that it would not be possible for them to work out a revival scheme on their own.

Hence, the board appointed IDBI as the operating agency (OA) with directions to conduct a techno-economic viability study and work out a rehabilitation scheme.

IDBI has been given broad guidelines to follow while carrying out this exercise. The OA was directed to take March 31, 2005 as the cut off date for the scheme. The bench directed the secured creditors not to file or pursue suits already filed against the company for recovery of dues. However, if the directions issued are not complied with by IFB within the given time frames, fresh applications for filing or pursuing suits may be made before the board, it said.

IFB was directed to be regular in the payment of all its current dues arising after the cut-off date since the recovery of such dues would not be covered in the proposed rehabilitation scheme, the order said.

Also, the bench would be averse to granting any extension of cut-off date or to providing protection under Sick Industrial Companies (Special Provisions) Act (SICA) against the recovery of such dues, the BIFR bench emphasised.

The bench recalled that IFB's reference was taken up first in March 2002. IDBI was appointed as the OA. The board had allowed some of the financial institutions and banks to continue their suit against the company for recovery of dues and funds subject to condition that decree obtained would not be executed without BIFR's order.

Aggrieved by this the company had appealed before the Appellate Authority for Industrial and Financial Reconstruction (AAIFR). The AAIFR while setting aside the Board's order, however, noted that there should be no bar for BIFR to consider such applications afresh.

Meanwhile, IDBI submitted that the chartered accountant firm appointed by the board to conduct special investigative audit was unable to complete its report, as information supplied by the company was insufficient. In March 2003, the board directed issuance of a show-cause notice to the company for non-compliance of its direction.

At the recent hearing, the bench also directed the Chairman and Managing Director to show cause within a stipulated time frame why he should not be prosecuted for not responding to the show-cause notice and for not attending the recent hearing.

More Stories on : Sick Units | Washing Machines

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