Tata Finance Ltd (TFL) has paid back Rs 10.73 crore that it received as dividend two years back from its erstwhile subsidiary Niskalp Investments and Trading Company Ltd.
Niskalp had recalled the dividend paid to its shareholders in 2000-01 as the Companies act does not permit a loss making company to pay dividends. Consequently, Tata Finance which held 99.4 per cent stake in Niskalp at the time of the dividend payment had to pay back the dividend.
F J Da Cunha, executive director of Tata Finance and Nariman Khan, company secretary, confirmed this move.
The Rs 10.71 crore of dividend had actually been announced as the additional dividend for the fiscal 2000. However, later on it was found that Niskalp's profit was insufficient to justify the dividend and, hence, it was converted to an interim dividend for the fiscal 2001. However, even in the next fiscal Niskalp fared even worse to justify the interim dividend. For the 12-months ended on June 30, 2001 Niskalp incurred an estimated loss of Rs 110 crore.
Niskalp was desubsidiarised from Tata Finance last year as a part of the latter's restructuring exercise.
Tata Finance had also filed an first information report (276/ 2001, dated August 7, 2001) with economic offences wing (EOW) of Maharastra government against its former managing director Dilip S Pendse and five other employees of Tata Finance for undertaking carry forward transaction through Niskalp.
The company in October 2001, has also additional information against Pendse and others to EOW alleging criminal breach of trust, forgery and use of false documents in regard to the sale of 2,15,000 shares of the company by the relatives of Pendse and his relatives.
The shares were purchased by India Emerging Companies Invest Ltd -- a subsidiary of Niskalp. Recently the company has also filed a civil suit of Rs 400 crore against Pendse in Bombay High Court.
