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Shrenuj Defends Position After Asset Seizure
Indian Firm to Operate Manufacturing Arm at Lower Utilization, Says Trading Division Unaffected
Jul 5, 2016 10:06 AM
By Rapaport News
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RAPAPORT... Shrenuj & Co. said an order seizing its inventories and restricting the movement of its senior managers will not significantly affect the business after the Bombay Stock Exchange demanded a clarification from the diamond manufacturer.
The Mumbai-based company defended its position following a an
order by India’s debt recovery tribunal to add Shrenuj’s Indian inventories to
assets that Hong Kong subsidiary Shrenuj Far East Limited had already given up
to receivers. Shrenuj is seeking legal advice to challenge the order which was
sought by lender ICICI Bank, the gem cutter said in an earlier note to the
exchange.
Explaining how its business will move ahead, Shrenuj said it
will operate its manufacturing division at lower utilization and insisted there
is no restriction on its trading business, which requires lower inventories.
The trading division generates “substantial revenue,” with diamond trading
representing 32 percent of total sales in fiscal 2016 and jewelry trading
contributing 4.5 percent.
Shreyas Doshi,
Shrenuj’s chairman and managing director, and Vishal Doshi, its group
executive director, were named by The Economic Times as the two people
who have been banned from leaving India.
“The group has been
running its business for more than 10 decades [and] will certainly overcome
this temporary situation and will ensure business stability and growth,” said
Doshi.
“We believe that this will not significantly affect the
overall working of the company,” Doshi added.
Nonetheless, diamond and jewelry trading sales showed two
consecutive years of decline, according to a breakdown of revenue provided by
Shrenuj to the stock exchange.
The inventory seized can be used to reduce the company’s
bank liabilities, the statement added.
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Tags:
finance, ICICI Bank, India, Manufacturing, mumbai, Rapaport News, Shrenuj, Shrenuj & Co.
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