Birla Power Solutions has submitted a proposal to Bombay High Court offering to repay money to its creditors of past eight years. However the Yash Birla group company will not pay interest to its fixed deposit holders
The debt-ridden Yash Birla Group unit Birla Power Solutions Ltd (BPSL) has proposed to refund money it collected over eight years ago from investors for its corporate fixed deposit (FD) scheme. However according to the proposal submitted before the Bombay High Court, the company would pay only the principal amount over next three years without any interest.
According to a report in Mumbai Mirror, promoters of BPSL intend to raise funds through family and friends and also through internal accruals by reviving the company and launching some cutting edge products in the portable genset sector. BPSL promised to clear all dues within a span of eight years as per its proposal submitted to HC.
Quoting advocate Niteen Pradhan, the counsel for BPSL, the report says, “We have also presented a payment proposal to the court. We intend to revive the company while making payments over a period of time”.
Earlier in February, Yash Birla’s wife Avantika and her maternal uncle Narayan Baheti met officials form the Economic Offence Wing (EOW) and assured them that, the Group would arrange money to repay its depositors.
According to reports from Moneycontrol.com, Yash Birla Group had sold its old South Mumbai property to Nahar Group for around Rs250 crore recently.
As per the Mumbai Mirror report, BPSL has also hired the services of an independent financial consultant, Devendra Jain, who deals in revival of stressed companies.
BPCL owes Rs329 crore to its unsecured creditors and lenders, and wants them to sacrifice 40% of their principal amount as it assures repayment over next three years. The company offered to convert 40% of Rs58 crore into equity to banks and financial institutions, who are on a verge to declaring BPSL debt as a non-performing asset (NPA). The company told the newspaper that dues owed to the income tax and other government departments will be paid over two years and dues to employees would be cleared in 12 months.
BPSL is being probed by EOW of Mumbai Police for defaulting in repaying its deposit holders. A criminal case has been registered under the Maharashtra Protection of Interests of Depositors' (MPID) Act. Its former managing director, PVR Murthy has been arrested. While the EOW is proceeding with freezing BPSL's assets, the company has moved Bombay High Court challenging the case and gave the proposal to repay its all creditors in eight years.
Moneylife earlier wrote about, Company Law Board asks Zenith Birla to pay dues of FD holders by 21st April. The Company Law Board (CLB) passed orders against Yash Birla Group’s other companies Zenith Birla India, Birla Power Solution, Birla Shloka Edutech, Birla Cotsyn directing it to pay its depositors under section 58A (9) of the Companies Act, 1956. Even after passing orders by CLB, several investors still have not received their money back from Yash Birla Group of companies. While several depositors who got their principle amount from the corporate FD, they did not get interest amount yet.
In February, income tax (I-T) officials questioned Yash Birla as part of the investigation into alleged tax evasion involving his companies, says a report from the Times of India. In January, the I-T department raided premises belonging to Birla and found several undeclared foreign accounts with a balance of crores of rupees, the report added.
Yash Birla is known for its lavish lifestyle and Page3 parties instead of his business moves, which shows the careless attitude of the Group. People had invested in his companies on goodwill of ‘Birla Family’.
Moneylife earlier reported, “Yash Birla Group companies in deep trouble?” We found that, Yash Birla Group companies have been struggling with many issues like liquidity crunch, non-payment of loans, negative cash flows etc. Its most of the companies are giving negative returns to the investors and its share prices are not even in double digits. The promoter’s stake in Birla Power Solutions is only 1.08% and in Zenith Birla India its 7.34%. It shows that the promoter himself lost faith in his company.
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Yash Birla Group companies in deep trouble?
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can anyone pls tell me where should i approach for my money...
CLB kolkatta says as it is debentures it does not come under its jurisdiction(funny) and when we file a complain in MCA the server time is always out i have tried end number of times ...
WHY ARE ...all news Chanel and web site silent about the case
pls..... need some news on the company ....
he has been a bad busienss man and just because he is Birla does not mean he should be shown lienency. People like him without any busienss accumen and just becasue they are born with the golden spoon, they can get away .
Arrest him, let him be in jail along with his other senior colleague officer. the staff have not been paid for more than 2 years and can u imagine the plight of the families who worked to bring his company when he and his team have swindled all the money into their pockets.