The Hindu Business Line : Ester Industries out of BIFR's purview

At a recent hearing, the bench noted the company's net worth has turned positive as on March 31, 2004 and the entire accumulated losses have been wiped out.

As per EIL's audited balance sheet as on March 31, 2004, the company's accumulated loss was nil and the net worth stood at Rs 124.91 crore. While discharging the company from the purview of the Sick Industrial Companies (Special Provisions) Act (SICA), the Board directed EIL to complete the necessary formalities with the Registrar of Companies (RoCs) concerned.

It also directed that Mr Duli Chand Chhajed, who was appointed as a special director by BIFR on the board of directors of the company, would be discharged with immediate effect. BIFR had received an application from EIL in August with a request for being discharged from the purview of SICA. The company also stated in its application that the revival scheme sanctioned by BIFR had been substantially implemented and the net worth had turned positive as on March 31, 2004.

The monitoring agency, Industrial Development Bank of India (IDBI), in its status report submitted in September 2004, stated that besides repayment of the entire one-time settlement dues of financial institutions and banks by the company and existing promoters, the sanctioned scheme had also been successfully implemented. IDBI also recommended to the bench to consider de-registration of the company from the provisions of SICA.

In keeping with the rehabilitation scheme sanctioned by BIFR, EIL had taken the Foreign Investment Promotion Board's nod in March for transfer of the 14.04 per cent stake held by a German financial institution, DEG, to the promoter, Saraswati Trading Company Ltd (STCL), for 50,000 euros.

STCL is a Mauritius-based company in which NRI investors hold a majority stake. EIL, which was originally promoted by Mr Sitaram Singhania along with STCL, manufactures polyester chips, films and yarn and PET films.