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Tuesday, May 24, 2005

Stanchart's dubious enforcement agencies

StanChart consortium emplys new collection agencies
KAVITHA VENKATRAMAN
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.

RBI in Contempt of High Court again

Contempt notice to RBI governor over non-payment on bond

Jaipur, May 24. (PTI): The Rajasthan High Court has issued contempt notices to RBI Governor Y V Reddy and three SBI officials for failing to comply with a court order.

Hearing a contempt petition filed by Mahendra Singh Rathore, a member of Bikaner royal family, Justice K S Rathore issued the contempt notices to Reserve Bank of India Governor Dr Y V Reddy, State Bank of India's Jaipur regional manager K N Tripathi and two other bank officials for not complying with earlier court order which had directed for payment on a seven-decade-old security bond.

As per the petition, Rathore's grandmother had deposited a sum of Rs 28,300 as security bond in the then Imperial Bank of India which later became State Bank of India.

The SBI branch in Ajmer refused to make the payment on the bond stating the matter was very old, so Rathore moved the court.

The High Court last year had decided the dispute in favour of Rathore and directed the bank to make the payment within two months.

Rathore moved the contempt petition after the bank failed to comply with the court's directive.