Money & Banking

First Leasing moves court against RBI order

R. Ravikumar Chennai | Updated on September 16, 2013

The Chennai-based First Leasing Company of India has approached the Madras High Court following the Reserve Bank of India order stopping it from transacting any further business, according to Farouk Irani, Managing Director, First Leasing. The RBI directive on Saturday said the decision follows an inspection of the company’s books of accounts and related documents as of March 31, 2013.

Irani said the company does not agree that even regular expenses should require RBI’s clearance, and “hence we have approached the court”.

He said the company has no depositors as on date. “We have paid back all our depositors. We have no intention to accept any deposits too,” he said.

The Reserve Bank of India in its directive said First Leasing Company of India shall not incur any further liabilities or transact any business until further orders in the light of the findings of the inspection of the books of accounts and other records as on March 31, 2013.

In public interest and in exercise of the powers conferred on it by Sections 45JA and 45L of the Reserve Bank of India Act, 1934, RBI said the company shall not sell, transfer, create charge or mortgage or deal in any manner with its property and assets without prior written permission of the Reserve Bank of India;  declare or distribute any dividend;  transact any business; or incur any further liabilities.

Meanwhile, the company announced the Bombay Stock Exchange that it has postponed its AGM to be held on September 18.

Published on September 16, 2013

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