Icds Merges Subsidiary With Self

In a move to strengthen its asset base, ICDS Ltd has amalgamated one of its subsidiaries, Manipal Investments Ltd, with itself. The decision to merge the companies was formally approved at a recent share holders' meeting.

According to ICDS, the merger has been necessitated owing to the Reserve Bank of India (RBI) enhancing the capital adequacy for NBFCs from the earlier eight per cent to 10 per cent. This is to be further hiked to 12 per cent from March 31, 1999. "ICDS has been providing fund support to Manipal Investments for its day-to-day operations and since investments in subsidiary firms have to be reduced from our net-owned funds for the purpose of capital adequacy, we find it difficult to further invest or to continue the existing investments in Manipal Investment," a senior ICDS official said.

 

Manipal Investment, a company engaged in the business of investing in shares, debentures, stocks and bonds, "with its limited resources found it difficult to carry on its operations and this is one of the reasons for it being merged with ICDS". The accumulated losses of Manipal Investment as on March 31, 1997, will be set off against the profit earned by the company during the period commencing from April 1, 1997.