Nagarjuna chairman to move court over NFL issue

Nagarjuna Group chairman K S Raju said that he will approach the court against the notices issued by the Ministry of Company Affairs against him and the original promoters of Nagarjuna Finance Limited (NFL) for allegedly failing to repay money to the depositors.

The ministry moved the economic offences court through the Registrar of Companies (RoC) against Raju for not repaying depositors money to the tune of over Rs 40 crore.

Admitting that some of the depositors of NFL are yet to receive their money back, the Nagarjuna Group chairman, however, said that the Mumbai-based Mahalaxmi Factoring Services Limited (MFSL), to whom the entire equity holding in NFL was transferred by the original promoters in the year 2000, is responsible for the mess.

"We ourselves repaid over Rs 250 crore to depositors before NFL was taken over by MFSL, which shows our sincerity. We handed over the company along with its assets and the remaining liabilities to MFSL on the condition that remaining depositors must be repaid their money. But according to our knowledge, though the company has been recovering money from the lenders it has not been passing the same to clear the depositors accounts," Raju said at a press conference.

According to him, the MFSL management still has assets of the previous NFL worth Rs 90 crore as against the Rs 40 crore it owed to the depositors.

"We have urged the High Court to appoint a liquidator and repay the money to depositors," he said, while appealing to the depositors to wait for some more time before the court takes a decision on it.

But he admitted that the Nagarjuna Group did not publicise the issue of transferring the sick NFL to MFSL and had not taken the depositors into confidence though it had followed all the transparent legal procedures in selling the company.