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Drt Likely To Auction Ms Shoes Properties

BSCAL 

Additional information provided by the company subsequently has been incorporated at the end of the report

The Debts Recovery Tribunal (DRT) is likely to issue an order for auctioning the properties of M S Shoes promoter Pawan Sachdeva in Gurgaon in the first week of July as part of the money recovery process.


Allahabad Bank had moved the tribunal sometime back, seeking redressal as MS Shoes and its guarantors had failed to return the money borrowed from the bank to the tune of around Rs 21.49 crore which does not include interests.

In an order delivered earlier this year, the DRT had attached all listed properties of Sachdeva and had prohibited him and his relatives from "transferring or charging the (under mentioned) properties in any way an that all be and they are prohibited from taking any benefit under such transfer or charge".

Documents available with Business Standard show that the property in Gurgaon, which is to go under the hammer next month, is a factory comprising land measuring 4.23 acres and land measuring 18.80 acres in Kherki village in Gurgaon.

Attempts to elicit a response from MS Shoes managing director Pawan Sachdeva yesterday proved futile as he refused to discuss the issue.

Properties of Sachdeva family attached by the tribunal (the full details of which are yet to be furnished to the tribunal) includes a plot measuring 536.11 sq yards in Punjabi Bagh, a farm house on Delhi-Jaipur highway, factories at C-30 & 31, F-10 & 12, SFS-15 and H-18 at DSIDC complex, Nangloi in Delhi and plot No 952, Block D New Friends Co-operative House Building Society.

 

Allahabad Bank had moved the DRT seeking, amongst other things, attachment of properties of yarn project at Girgaon and undefined interest in Hudco land for the proposed project for a five-star and four-star hotels at Andrewsganj, in the posh south Delhi area.

 

MS Shoes in 1995 had come out with a public issue of 1,75,84,800 zero interest unsecured fully convertible debentures of Rs 199 each for cash at par aggregating Rs 349,93,75,200 to the public and issue of 31,28, 500 fully convertible debentures of Rs 250 each for cash at par aggregating Rs 78,21,25,000 to NRI/OCBs on firm allotment basis, and both together aggregating Rs 428,15,00,200.

 

In its petition to the tribunal, Allahabad Bank had stated that with a view to meet the requirements of MS Shoes, the bank had sanctioned bridge loans in 1995 against the public issue cum rights issue for Rs 20 crore at the rate of 18 per cent interest per annum.

 

The public and rights issue had been floated by MS Shoes to finance an integrated hotel project to be set up at a site belonging to Hudco in Andrewsganj, Delhi, for a five and four-star hotels; yarn project to be set up as an integrated spinning unit for manufacturing of yarns at Gurgaon for cotton and polyster filament yarn cotton, combed cotton polyster blended and texturised yarn for which the land had been acquired and to meet the expensee of the issue -- most of the projects having failed to take off.

 

"Pending final decision on the application, the applicant seeks issue of an interim order which has become necessary in view of the poor financial position of the respondent No 1 (MS Shoes East Ltd) as the public issue has failed and a huge amount is payable to Hudco, besides huge amounts of loans to be paid by respondent No 1 to other banks and private institutions," Allahabad Bank had stated in its application.

ADDITIONAL INFORMATION
In May 2014, MS Shoes informed us of the subsequent developments in the company which are as follows:
MS Shoes repaid the entire loan amount to Allahabad Bank in May 2009. The company says all the other debtors were also repaid a long time ago. Also, the Debt Recovery Tribunal proceedings were closed in July 2009. The company also said it has decree of the 5-star hotel project in its favour.

 

First Published: Fri, June 12 1998. 00:00 IST
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