BIFR orders winding up of Gujarat Perstorp

The company was jointly promoted by Apollo Tyres and state govt

The Board for Industrial and Financial Reconstruction (BIFR) has passed the order to wind up the state-run Gujarat Perstorp Electronics Ltd (GPEL).

The company, which manufactures and deals in copper clad laminates, was declared sick under Sick Industrial Companies (Special Provision) Act 1985 by BIFR in 1997. The company was jointly promoted by Apollo Tyres Ltd and Gujarat Industrial and Investment Corporation (GIIC).

The BIFR in its review hearing, held on July 5, 2004 confirmed the winding up of the company under section 20(1) of the Sick Industrial Companies Act with directions that the concerned High Court be informed accordingly to further necessary action.

"Once the court appoints the liquiditor for GPEL, we will submit our claims to get our dues from the company, which are subject to realisation by the liquidator. GICC will always try to protect its interest," G C Murmu, managing director, GIIC told Business Standard on Wednesday.

However, he did not divulge the details of GIIC's investment in GPEL. "We have informed the BSE that the rehabilitation scheme was sanctioned by the Gujarat High Court on June 15, 2001 and was subsequently circulated by BIFR on September 4, 2001. In view of the non-viability of the company, BIFR at its review hearing held on July 05, 2004, has confirmed winding up of the company with the direction that their order be sent to the concerned High Court for the further necessary action," said a company official.

Earlier, the board of directors of the company has concluded that since the operations of the company are not viable, it is not possible for the company to continue with its operations. Accordingly, the company and the factory remained closed on permanent basis with effect from February 1, 2004.

However, a draft rehabilitation scheme (DRS) was formulated and circulated by BIFR in October 1999, according to the which, the cost of the scheme had been estimated at Rs 29.31 crore.

The promoters had raised certain objections to the payment of the one-time settlement (OTS) amount and the institutions expressed their unwillingness to accept the contentions of the promoters for payment of the OTS.

Even the state government and the Department of Income-Tax (Recovery) had not given their consent to the reliefs and concessions envisaged from them in the DRS.

Finding that there was no meeting ground between the institutions and the company regarding the scheme, the BIFR confirmed winding up of the company.

The promoters hold around 47 per cent stake in the company.