Deposit holders drag Ind-Swift to CLB

Final verdict to be given after a few days

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About 3,000 holders of Chandigarh-based Ind-Swift Laboratories’ fixed deposits (FDs) have taken the firm to the Company Law Board (CLB), accusing it of defaulting on repayments of the principal amount. The case against the pharmaceutical company was heard at CLB’s bench in Delhi on Wednesday.

“The order has been reserved for now. Cases of all those who were present in the court were heard. The final judgment will be delivered a few days later and displayed on the website,” said Prem Chand, officer at the Delhi bench, told Business Standard.

The FD holders had registered complaints against Ind-Swift and two  related entities. All three cases were heard on Wednesday. About 100 investors were present.

Investors claim the company, which had been referred to the corporate debt restructuring cell, defaulted on the FD principal payouts maturing in the June quarter. Chand said the total default amount was being worked out. Complaints indicate the amount owed is in the range of Rs 10,000 to Rs 10 lakh per holder. The company’s total debt as on March 31 was roughly Rs 1,200 crore, according to Capitaline.

The aggregate amount of fixed deposits as on March 31, 2012, was roughly Rs 87.9 crore as against Rs 58.2 crore in the previous financial year, according to the 2011-12 annual report.

Ind-Swift did not respond to an email query or multiple phone calls by Business Standard on this matter.

The company was offering interest rates of 12.5 per cent on three-year deposits and 10.5 per cent on one-year fixed deposits. Corporate FDs with lower credit ratings are considered highly risky because these are unsecured. This means that in case of a default, the amount invested is not secured and the chances of investors losing money is high.

Various consumer forums have been flooded with investor grievances about Ind-Swift not returning their money. According to investors, the company had sent post-dated cheques, which bounced due to unavailability of funds. Investors said the company had given the quarterly interest payouts but the principal-on-maturity payouts had not been honoured.

“They issued me two cheques, being the principal refund, but both have bounced...Company is not responding to contacts, emails and Speed Post communications,” wrote Krish Narasimhan, a deposit holder.

An Ind-Swift FD holder, who did not wish to be named, said he had received part of the principal amount but that was after the company was sent a legal notice.

INVESTMENT GONE SOUR

* Ind-Swift Laboratories defaults on pay-outs on fixed deposits

* Close to 3,000 investors register complaints with Company Law Board

* Hearing against the company held on Wednesday at CLB’s New Delhi Bench

* Final judgment to be announced in the next few days, says Bench officer