Industrial Development Bank of India (IDBI) has turned down Binani Industries' proposal to pay a dividend of 20 per cent to its shareholders for financial year 2000-01.
Binani Industries, which had availed of financial assistance from IDBI, was required to obtain the financial institution's approval for payment of dividend in terms of covenants of the loan agreements.
Despite institution's disapproval to the dividend plan, Binani Industries had recommended the payment of dividend, IDBI has informed the Bombay Stock Exchange. None of the Binani Industries' officials were available for comment on the issue.
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IDBI nominee director had also brought this fact to the notice of Binani Industries' board at its meeting held on June 7, the notice said.
Binani Industries has been taking effective measures to cut down costs in order to remain competitive. The company was expecting a 100 per cent rise in production of zinc metal and sulphuric acid during the last fiscal.
The company had reported a 6.4 per cent drop in net profit at Rs 19.74 crore for 2001 as compared with Rs 21.09 crore in the previous fiscal and a total income of Rs 260.67 crore against Rs 261.77 crore last year.