Itc Seeking Exemption On Global Accounts
ITC Ltd is seeking an exemption from the government under section 212 of the Companies Act in relation to providing details in its annual report of the audited accounts of its Singapore-based wholly owned subsidiary, ITC Global Holdings Pte Ltd. ITC Global is currently under judicial management in Singapore.
The section pertains to supplying several details on subsidiary companies.
ITC's request on an exemption comes in the wake of the Singapore High Court's order in mid-April, which has said judicial managers are not required to conduct an audit of the company. This means ITC would not be in a position to submit the details of ITC Global's accounts for the year ended December 31,1996, in its annual report, since the audit is now not necessary.
ITC Global has been under judicial management since December 6, 1996. The ITC board too at its last meeting had taken stock of developments relating to its subsidiary. Board sources said the exemption had become necessary since the audited accounts for ITC Global would not be available at all.
Section 212 requires the holding company to furnish, among other things, the following documents relating to its subsidiaries: the balance sheet of the subsidiary the profit and loss account the report of the subsidiary's board of directors the report of its auditors.
The ITC board has also taken note of the fact that ITC Global's judicial managers have indicated claims from the creditors of the company, ranging between $48 million and $49.8 million, for which the board does not accept any legal liability.
Without prejudice to the legal rights of the company, these are also being examined by ITC. The eventual outcome would be subject to approvals from the RBI and other government agencies.
The tobacco major has already provided, as a measure of prudence, an amount of Rs 34.99 crore on account of receivables from ITC Global.
ITC, along with ITC Global has also filed a suit in the court in the United States against the Chitalia group of companies, for recovery of dues worth US$ 15.94 million (of which $12.19 million is due to ITC).
The Chitalias have filed a counter claim of $55 million against ITC. This includes a $40 million claim on account of alleged libel, slander and punitive damages. The suit is pending.
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