Bob Made Oa To Oversee Castle Breweries Rehab

The Board for Industrial & Financial Reconstruction (BIFR) has appointed Bank of Baroda (BoB) as operating agency (OA) to examine the viability of Castle Breweries Ltd and to formulate a rehabilitation scheme for the sick company.

The Board has also directed the company to submit a comprehensive rehabilitation proposal with means of finance fully tied up along with audited balance sheet for the last five years to the OA.

The Board has appointed an OA as the company failed to submit rehabilitation proposal under section 17 (2) of Sick Industrial Companies Act (Sica) to the board despite a lapse of nine months.

 

Castle Breweries was declared sick in March 1999 and the promoters of the company were confident of reviving the company on their own as per their submissions to the board. A two member bench including members T R Sridharan and N R Banerji observed that the company had failed to submit a rehabilitation proposal to be considered by the board under section 17 (2) of Sica despite a reasonable time gap.

The bench was, therefore, satisfied that the company could not revive on its own. And it initiated the measures specified under section 18 of the Act in public interest.

The bench asked the OA to independently examine the techno-economic viability of the company by using in-house technical expertise or engage the services of a competent technical consultant if adequate in-house expertise is not available. The bench set some guidelines for the OA to follow while examining the viability of the company and preparing a report for its rehabilitation.

"If the proposal is found viable with means of finance fully tied up, the OA would formulate a proper rehabilitation scheme, hold a joint meeting for evolving an agreed package and submit a report to the board," according to the bench's guidelines.

The company and its promoters have been directed by the board not to dispose of any fixed or current assets of the company without the consent of the BIFR.