New Delhi, Feb. 12
IN what could set a trend in protecting the interest of small investors, Bajaj Capital Ltd, a financial services and broking company that acted as an intermediary in sourcing investment, is joining forces with small investors to help settle their grievances.
Bajaj Capital is exploring the possibility of joining the liquidation petition against the pharmaceutical major Morepen Laboratories Ltd and is in the process of seeking investors' nod. With this, it will facilitate small investors in joining this petition.
This is even as the Government moved the Company Law Board (CLB) last year to appoint its nominees on the board of Morepen and while a few petitions are pending before the Himachal Pradesh High Court.
Sources in Bajaj Capital told Business Line that the finance company has been closely following up on Morepen on repayment of deposits. In fact, more than 100 investors had routed their investments in the pharma company through Bajaj Capital.
Defaults on repayment
The company, in the last couple of years, had defaulted on repayment of fixed deposits to the tune of Rs 156.2 crore.
A repayment scheme was subsequently approved by the CLB, according to which deposits up to Rs 5,000 were to be repaid within a year and the rest over four years.
However, according to Mr D.P. Marria, an investor in the company, "Now even the hardship cases are finding it difficult to get refunds on their investments."
According to sources in the Ministry of Company Affairs, any future action against Morepen will be taken only after a CLB order for appointing Government nominees on the company's board is obtained.
More headachesWhile maintaining that the success of Morepen's restructuring proposal would largely depend on the corporate debt-restructuring (CDR) plan approved by the banks and financial institutions, Mr Sushil Suri, Chairman and Managing Director of Morepen, hoped the CDR proposal would be finalised in a month.
He also said the company would look at alternative funding from other institutions or strategic investors.
Banks and financial institutions have raised objections to Morepen's proposal to allow fixed deposit holders of the company to opt for conversion of their deposits into fully convertible debentures. They have approached the Himachal Pradesh High Court on this issue.
Morepen Lab had raised $15.25 million in GDR (global depository receipts) in 2003, which are locked up in a case with the Debt Recovery Tribunal.