B'lore firm goes to court against HDFC Bank

The company has filed a suit in the Bangalore City Civil Court for declaring the contract as void, as the company has been advised that it voilates the Exchange Control Regulations, including Reserve Bank of India's master circulars and guidelines on derivatives, the company said in its statement.

Earlier, HDFC Bank had filed a claim against the company in the Debt Recovery Tribunal, Bangalore for recovery of Rs 4.53 crore allegedly due to them on this contract, the company statement added.

 

HDFC Bank had advised the company that the mark-to-market loss on this contract is about Rs 175 crore as on March 10, 2008, the last communication the company received from the bank.

Besides plain-vanilla forward contracts, the company entered into some foreign exchange derivative contracts on the advice of its bankers, during the last financial year ended March 31, 2008, the company said in its statement.

"The accounting implications of this contract and the company's positions on the same as well as other foreign exchange derivative contracts will be appropriately reflected in the financial statements of the company as of March 31, 2008, which are under preparation,'' the statement added