OBC hasn't served loan recovery notice under SARFAESI: Moser Baer

Leading global tech-manufacturing company Moser Baer Wednesday sought to clarify the legal position on the outstanding debt of its subsidiary with the Oriental Bank of Commerce (OBC) and said no notice under the SARFAESI Act has been served by the bank for recovery of dues.

Observing that "OBC is not a lender to Moser Baer India Limited but has outstanding debt from one of its solar subsidiaries", the company said in a statement here that: "... no notice under SARFAESI Act has been served."

Oriental Bank of Commerce chairman S.L. Bansal had told a news channel here last week that the bank had issued a notice of recovery for about Rs.430 crore from Moser Baer, and that at the end of the SARFAESI Act's notice period of 60 days its assets and mortgages on various property with the bank, would be put on sale.

The SARFAESI (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest) Act, 2002, regulates banking sector funding activities, while Moser Baer's clarification assumes importance in the wake of last month's Madras High Court order dismissing writ petitions filed by various companies questioning the constitutionality of the Act.

Dismissing more than 50 writ petitions in a single order, the court said the petitioners had borrowed money from the respective respondent banks and had not repaid the amounts.

Describing the recovery underway in the country's solar manufacturing sector aided by a conducive regulatory environment, Moser Baer offered to work with the bank towards an amicable solution for the company's revival.

"We value our relationship and cordial dialogue with OBC and are confident of arriving at an amicable solution for revival," the company said.