Topline Shoes may move SC against criminal case

Topline Shoes Ltd, identified among the 122 vanishing companies by the Department of Company Affairs (DCA) and the Securities and Exchange Board of India (Sebi), may move the Supreme Court against a criminal case lodged by the Vadodara city police against the company.

The Vadodara police had lodged a criminal case against Indian cricket legend Sunil Gavaskar and five directors of Topline Shoes last week for allegedly cheating shareholders of the company.

The case was lodged under the insistence of DCA and its local representative, Registrar of Companies, Ahmedabad.

A senior official of the company, while blaming Corporation Bank and Canara Bank for stopping disbursement of working liquid capital, said that with the latest development in the matter, Topline has not much option left except approaching the highest legal entity in the country.

"Topline, in this situation, is left with nothing but the possession of its fixed assets. The company is ready for an open discussion on issues related to closing down of its operations with bodies such as Sebi and DCA," said HMG Murthy, managing director, Topline.

Topline was incorporated in 1991 and was granted a 100 per cent export oriented unit licence for the manufacture and export of nine lakh pairs of footwear and components.

The company collected the share capital of Rs 897 lakh including Rs 465 lakh from public. Murthy has maintained his 41 per cent stake till today while other directors quit the board gradually.

Topline received only Rs 52 lakh against the sanction of Rs 275 lakh from Corporation Bank against the mortgaged assets of Rs 7 crore to avail of working capital, Murthy says.

Murthy has filed a compensation claim of Rs 34.40 crore against both the banks. On the other hand, a case filed from the banks are pending in the court to recover Rs 52 lakh plus interest.

"Banks may take away raw material brought from those money, which has deteriorated by now due to insufficient working capital. Banks crippled the company by stopping funding," said Murthy.

He has also welcomed the Sebi and Registrar of Companies to join hands with him to fight against the two public sector units. Open letters have been sent to both the authorities with detailed explanation of his transactions with the Corporation bank, Canada Bank and Punjab National Bank.