Hirco threatens action against Hiranandanis

The Panvel and Chennai townships were the bone of contention between the two and both the subsidiaries of Hirco have defaulted on their payments to their lenders

In a fresh twist in the fight between Hirco Plc and Mumbai-based developer Hiranandani group, London listed Hirco on Tuesday said it would notify law enforcement authorities about its Chennai and Panvel townships.

The two townships were the bone of contention between the two and both the subsidiaries of Hirco have defaulted on their payments to their lenders.

In a statement, Hirco said based on information provided by the Indian project companies,  it has calculated that cash collections for Panvel and Chennai totalled approximately £192 million (around Rs 2,000 crore) till November 2013. According to a Cushman and Wakefield valuation, the Chennai and Panvel assets had a value of £556 million (Rs 5,500 crore), Hirco said, adding these assets secured debt amounting to £101 million (Rs 1,000 crore).

"Hirco Plc has, therefore, written to the directors of the Indian project companies demanding an explanation as to how and to whom the cash collections were disbursed and why the companies were unable to repay their debts.  The company has also asked for a forensic accounting examination of the books and records of the Indian project companies.  Finally, Hirco Plc has notified the directors of the Indian project companies that if adequate explanations are not forthcoming," Hirco said in the statement posted on its website.  

Hirco Plc will also continue to pursue redress against Niranjan Hiranandani and Priya Hiranandani, for fraud and other wrongdoings through the ongoing litigation and arbitration proceedings, Hirco said. Hiranandani spokesperson could not be contacted for comments.

Though Hirco was floated by Hiranandanis and it acted as the family's investment vehicle, Niranjan stepped down as chairman of the company in 2010.

Hirco also said Bombay High Court has appointed the court receiver to manage the property of  Hiranandani Palace Gardens, Chennai residential project of London litsed Hirco Plc.

The court passed the order on December 24, while hearing an arbitration plea filed by Tata Capital Financial Services after the Chennai subsidiary of  Hirco defaulted on a loan of Rs 76 crore.

Tata Capital alleged in support of its winding up petition that Hiranandani Palace Gardens had misrepresented facts to obtain the loan, Hirco said in a statement.

The court also directed Hiranandani Palace Gardens to file an affidavit of disclosure detailing all of that company's unencumbered assets.