Msfc Seeks Closure Of Orkay Industries Over Debt Default

A winding-up petition was filed under sections 433 and 434 of the Companies Act in the Mumbai high court by MSFCs solicitorsMulla and Mullaon Wednesday.

According to the petition, Rs 19.50 crore was lent to Orkay through a 90-day bill discounting facility. Sources questioned the very manner in which MSFC doled out the money to Orkay.

The initial loan that was extended to Orkay was around Rs 10 crore and at the end the term, meetings were held between MSFC and Orkay officials for rescheduling of the repayment.

But the meetings requesting for rollover concluded with the state finance corporation sanctioning another Rs 5 crore to the defaulting company.

MSFCs own role, understandably enough, has been sidelined in the petition filed by the Maharashtra government-controlled institution.

MSFCs petition also points out to several post-dated cheques from Orkay getting dishonoured.

Sources in MSFC said the institution was promised Rs 5 crore from Orkay on September 15, but that remained a mere lip-service.

MSFCs hopes rose when Orkay disposed of its Patalganga plant to the JVG group for a supposed sum of Rs 200 crore.

This is the second instance of Orkay getting into trouble for non-payment of dues.

In August this year, Bombay Dyeing, Orkays raw material supplier, had filed a criminal case against the company for bouncing of cheques worth Rs 1.5 crore.

The polyester producer has been in trouble since last year when it decided to sell off its plant. It could not find many buyers due to its out-dated technology and the stiff price demanded by the Mehras, who run Orkay.

Though Delhi-based JVG group has decided to buy the plant, the sale is being opposed by financial institutions who want Orkay to first pay off their dues.