Peerless Files Winding Up Plea Against Swc Over Default

The situation has emerged, despite statements in the media by SWC managing director Ravi K Jain that internal accruals, asset sales and cost cuts would pay for retiring short term liabilities.

But Peerless has not received the money from SWC with the failure of the plan. On account of the weekend closure, the functionaries dealing with the matter could not be contacted and senior executives do not appear fully aware of the Peerless move, said an official SWC spokesman.

He further added that SWC had discussed the matter of unpaid ICD borrowings with Peerless, assuring them of full repayment of the ICD money along with the interest due thereon, in a time-bound manner. Peerless, the largest residual non-banking finance company is believed to have supported Shaw Wallace during the financial crisis.

 

In addition to the Rs 12-crore loan, Peerless has issued ICDs of Rs 7 crore to the group companies of Shaw Wallace. Loans of about Rs 3 crore has been made to Shivganga Investments, Rs 2 crore to Ganpati Investments. Other group companies to which Peerless has issued loan include General Electric Company, Nihon Electric and Malleswar Finance and Investment Company. Moreover, non-convertible debentures of Rs 5-crore have also been issued against securities of property at Thambuchetty in Madras, added Peerless sources.

Peerless itself had been facing financial problems because of non-payment of dues, source added.

The SWC spokesman referred to statements earlier in August in the media by the company regarding repayment of ICD dues by August 1997, and said that optimism was based on booming business and the consequent revenue generation. But the income tax raids in end-August have come as a major disruption of all positive activity thus retarding its bid to mobilise resources. But inside sources say that Peerless' ICD dues, apart other dues have also not been honoured during August, though no concrete information is available in this regard. It also appears that liquor sales were relatively unaffected by the tax raids. The sources point out that it remains a mystery as to why the funds mobilised through the liquor sales are not being used to pay back the creditors.