The Hindu Business Line : Daewoo assets sell-off may be mired in more legal tangles

THE sell-off process of the assets of the erstwhile Daewoo Motor India may be headed for more legal tangles, with the revenue department proposing to take further legal action to recover dues of about Rs 1,000 crore.

Sources in the department have said that they are considering issuing a showcause notice for the confiscation of machinery at Daewoo's Surajpur facility. This comes in the wake of the revenue department obtaining a limited stay order from the Bombay High Court on the fresh bidding process (which closed on April 25) for the sell-off of Daewoo's assets initiated by the Debt Recovery Tribunal (DRT), Mumbai.

"The issue will further come up before an appellate tribunal this week. In case we are judged the aggrieved party, we will go to the High Court," the source said.

The department had earlier filed an appeal claiming first charge over recovery of dues from the sell-off of the assets. This was in response to a DRT order last year, which had held that the ICICI-led lender consortium would have first charge on Daewoo's assets for recovery of dues, ahead of the Government's claim.

At the same time, the source said that a parallel process for sorting out the impasse had been kickstarted in the form of an out-of-court settlement with the lenders. Though few details of the ongoing settlement process are available, sources said that it would consist of a formula by which the dues recovered from the sell-off would be divided between the lenders and the Government. This, the source hinted, would be a preferred option and in the interest of all.

However, the delay caused by the impasse between the lenders and the Government has made General Motors, the only company in the fray for purchase of Daewoo's assets, look at other options for its expansion plans in India. The company has stated that it will purchase the assets only if it will come free of any liabilities.

General Motors had announced last year, that if the proposed deal were to go through, it would use the Surajpur assembly unit for making small cars for the Indian market.

Meanwhile, institutional sources said that no bids had come in during the fresh bidding process, which closed on April 25.

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