Financial Daily from THE HINDU group of publications
Saturday, Nov 30, 2002

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BIFR confirms winding up of Real Value

Richa Mishra

NEW DELHI, Nov. 29

LIFE may soon be extinguished out of Maharashtra-based Real Value Appliances Ltd (RVAL), manufacturers of Ceasefire brand of fire extinguishers and vaccumizer cooking equipment, with the Board for Industrial and Financial Reconstruction (BIFR) confirming its prima facie opinion of winding up the company.

The BIFR bench recalled that RVAL was declared a sick industrial company in 1997. In August 2000, the bench had sanctioned a rehabilitation scheme for the revival of the company. By its order dated November 2001, the bench noted that the company and its promoters had failed to implement the sanctioned scheme and declared the scheme as failed. The bench had simultaneously directed IDBI, the operating agency, to issue advertisement for change in management of the company.

IDBI, in April 2002 informed the Board that no proposal was received in response to the advertisement. The bench in July 2002 directed for issuance of a show-cause notice for winding up the company. The recent hearing was to consider objections and suggestions to the same.

At the recent hearing, the bench noted that there was no rehabilitation proposal with means of finance fully tied-up for consideration of the Board despite ample opportunities having been given to all concerned. Besides, the promoters of the company had also submitted that they had no objection to the winding up of the company, the bench noted.

Under the circumstances, the bench confirmed its prima-facie opinion that RVAL was not likely to make its net worth exceed its accumulated losses within a reasonable time while meeting all its financial obligations. The company as a result was not likely to become viable in future and hence it was just and equitable that it should be wound up, the bench said.

"No protection would be available to the company under Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985," the bench said.

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