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Search begins for new guard at Onida Savak

Richa Mishra

NEW DELHI, May 1

THE Board for Industrial and Financial Reconstruction (BIFR) has directed Industrial Development Bank of India (IDBI) to advertise for a change of guard for Onida Savak Ltd to revive the ailing company.

The BIFR Bench, after due consideration of the submissions came to the conclusion that the company was sick. The Bench declared the company sick under Section 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act (SICA), 1985, as its net wort h was eroded further as per Onida Savak's subsequent balance sheet for 2000.

Earlier, the Bench had directed the operating agency to look into the objections raised by the banks and institutions. The operating agency had got an special investigative audit (SIA) done through K. K. Goel and Associates (KKGA).

At the recent hearing, the Bench appointed IDBI as the operating agency under Section 17(3) of the Act to prepare a viable rehabilitation scheme for the company keeping in view the provisions of Section 18 of the Act.

The Bench, in the light of the submissions made during the hearing, was of the opinion that the revival of the company should be through transparent procedure taking the board and the secured creditors into confidence.

``The Bench accordingly directed that the operating agency will advertise for a change in the company's management for the purpose of rehabilitation of the company,'' the board said.

The Bench, however, permitted the present promoter to respond to the advertisement for change of management. In case the present promoter also applied, and other conditions remained the same, they would be given preference over the proposal submitted by the other applicants, the board said.

IDBI has been asked to follow a prescribed time schedule for the whole process. The cut-off date will be December 31, 2001, the Bench said.

Onida Savak has been directed not to dispose off its fixed and current assets without specific approval of BIFR and the chargeholders under Section 22A of SICA. However, in case the unit was working, the current assets could be utilised for running day-t o-day operations.

Further, the company and its promoters without the prior approval of BIFR would not enter into any agreement or lease or take any other policy decision of like nature, the Bench said, adding that if any decision was to be taken within this period, the ne cessary permission of the board was to be obtained.