The Unit Trust of India (UTI) has initiated recovery proceedings against MCS, a Mumbai-based company engaged in financial intermediary services.
UTI had subscribed to MCS' 15 per cent privately placed non-convertible debentures worth Rs 3 crore in December 1994. These debentures were due for redemption on December 19, 2001. However, the company failed to redeem the debentures on the maturity date.
K Madhava Kumar, a UTI spokesperson, said: "In spite of repeated reminders, the company has failed to make the payment to the trust. We have already initiated measures to recover the dues."
More From This Section
MCS had approached UTI in September 2001 to issue a no-objection certificate to cede pari passu charge in favour of SICOM to avail of a corporate loan worth Rs 5 crore. The loan was disbursed to MCS by SICOM in October 2001.
SICOM is a financial institution dedicated to catalysing development in the industrial, services and infrastructure sectors in India.
The company, at the time of seeking the loan, had said that out of the total amount of Rs 5 crore, Rs 3 crore would be utilised to repay the debentures, UTI officials pointed out.
"However, the company has not cleared the trust's dues till date. In fact, the company had earlier requested us to consider the prepayment of debentures without charging prepayment premium," they added.
MCS witnessed a change in management last year with the chairman and managing director of the company Arun Agarawal along with other members selling their holding in the company through a negotiated deal.
Consequent to the change in management, Kapil Gupta, Saurabh Rateria, Rajveer Sign, P N Rao and B Narasimhan were inducted on the company's board.
MCS had achieved a total income of Rs 28 crore and a net profit of Rs 72 lakh for the financial year ending March 2001.