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Tuesday, May 24, 2005

Stanchart's dubious enforcement agencies

StanChart consortium emplys new collection agencies
Posted online: Tuesday, May 24, 2005 at 0000 hours IST (source express newsline)

CHENNAI, MAY 23: Knights Restructuring Services, a financial recovery and restructuring firm, has signed an agreement with a consortium of banks to recover loans aggregating Rs 150 crore to Rs 200 crore from a South India-based industrial component manufacturing unit. The firm has been appointed as enforcement agency by the consortium of banks led by Standard Chartered Bank. The consortium includes major banks like UTI Bank, Centurion Bank, Union Bank of India and SASF (Stressed Asset Stabilisation Fund, a trust created by Industrial Development Bank of India).

Shashank Rajurkar, managing director of Knights told FE that Standard Chartered Bank had signed up with the firm on behalf of the other banks in the consortium to recover dues from the now defunct company. Over 75% of the banks in the consortium have given their consent to appoint Knights as the enforcement agent as required under the Securitisation Act. He, however, refused to name the defunct company.

The company, he said, was a export oriented unit manufacturing industrial components which could be used across sectors including automobiles. It had major exposure to the export market especially the US and Europe. The company ran into rough weather and downed shutters about three years back. “We have taken up the task of recovering the aggregate loan amount of Rs 150 crore to Rs 200 crore lent by 15 banks. Knights might take possession of all the assets of the company including the factory which have been given as collateral within the next two months to recover the dues,” he said.

The assets of the company is very complicated and will not find buyers in the domestic market. “Even if we have to auction the assets we cannot find an Indian buyer. We are planning to reach out to those people in the foreign market like the US, Europe and some other Asian countries who would be interested in purchasing the assets”, Mr Shashank Rajurkar said.


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