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| Govt seeks details on $437 mn raised by Tata Power |
| BS Reporter / New Delhi May 11, 2009, 00:00 IST |
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The Directorate of Enforcement has sent a letter to Tata Power asking for details on $437 million raised by the company overseas in 2007.
The government department sought the information under Section 37 of the
Foreign Exchange Management Act last month. Besides, it has also sought details on the Tata Power subsidiary in Cyprus.
According to sources, Tata Power is one among many companies which had raised money overseas through ADR, GDR and FCCBs in the last few years and have been sent letters by the directorate, which is looking into whether the funds were utilised for the purpose for which they were raised.
The directorate has pointed out that Tata Power had raised $437 million overseas. Out of this amount, $161 million is with guarantee and $276 million with counter-guarantee from an Indian party. Tata Power has been asked to explain the nature of the guarantee offered for the loan.
The directorate has also asked for details on Tata Power, Cyprus, a wholly-owned subsidiary of Tata Power. The information sought includes documents of its incorporation, details of further investments or loan by the parent company, paid-up capital, subsequent alteration in share capital if any, nature of its core activity, details of repatriation, details of borrowings from fin-ancial institutions and the guarantee provided for securing loan as well as the purpose and utilisation of the borrowings.
When contacted, a Tata Power spokesperson said: “The company believes that the funds remitted, guarantees provided and loans raised by Tata Power were according to the laws of the country and there have been no violations. The company has co operated and provided full d tails to the queries raised.”
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