Maha Rashtra Apex returns deposits

The Manipal-based Maha Rashtra Apex Corporation Ltd (MRACL), which was recently caught in a financial crisis and hit headlines for faulting its depositors, has refunded all bondholders and depositors whose deposit is Rs 5,000 and less and for others at 15 per cent of the outstanding debts as per a decree order of the Karnataka High Court.

Out of about Rs 300 crore due to about 1.20 lakh depositors, it has refunded approximately Rs.50 crore, according to the Corporation's depositors' action committee here.

The MRACL and its two subsidiaries, Canara Nidhi Ltd. and Manipal Home Finance, having 120 branches all the over the country, had stopped transactions in April 2002.

Affected by this, the depositors had formed an association and taken to agitational approach demanding refund of their deposits.

Subsequently, the company's managing board had held discussions with the depositors and submitted to the Karnataka High Court a repayment scheme.

The Court had approved the revised scheme in October 2004. Under the scheme, all bondholders and depositors whose deposit is Rs 5,000 and less are to be paid, along with accrued interest up to March 31, 2002, in one installment within six months.

All other bondholders and depositors are to be paid 15 per cent of the outstanding dues before the expiry of the 6th month, 20 per cent before the expiry of 18th month, 25 per cent before the expiry of 30th month, 20 per cent before the expiry of 42nd month, and the aggregate balance 20 per cent of the outstanding debts and the interest payable up to March 31, 2002 on or before the 54th month from the effective date.

The corporation has complied with the compromise scheme and paid the first installment, while the second installment is falling due in the next few months. Meanwhile, it has to obtain High Court permission for disposal of its assets.