Bhansali Seeks To Revive Crb

C R Bhansali, the prime accused in the Rs 1,200 crore CRB scam, has submitted a detailed plan in the Delhi High Court for revival of his company, CRB Capital Markets. The company is under provisional liquidation at present.

In response to Bhansali's surprise initiative, the Delhi High Court has issued directions to the Reserve Bank of India and the official liquidator to ascertain the asset-liability position of the company.

The court has also asked the RBI to examine the viability of the proposed revival scheme.

Government officials conceded that if the revival scheme was accepted, it would offer unsecured creditors some hope of getting their money back. However, it would also ensure that Bhansali stays out on bail to see the scheme through, they added.

Last year, CRB Capital Markets and its other group firms had defaulted on payments to depositors, resulting in panic-stricken investors deserting other NBFCs in droves.

The RBI had subsequently filed for liquidation of the company in the Delhi High Court. Bhansali has since been under investigation by the Central Bureau of Intelligence.

After having been initially taken into custody, he is now out on bail.

Bhansali has filed for revival under section 391 of the Companies Act 1956 that deals with "power to compromise or make arrangements with creditors and members."

Section 391 states that where a compromise or arrangement is proposed between a company that is liable to be wound up and its creditors/members, the court may order a meeting and sanction the plan if it is satisfied that the statutory majority is acting in a bona fide manner.

However, if such a compromise or arrangement is not bona fide but intended to cover misdeeds of delinquent directors, then the court has the discretion of not sanctioning such a proposal.

The court also has the power to reject such a scheme if its object is to prevent investigation, or there is a flagrant failure in the management of the company's affairs.