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Shrenuj Seeks Legal Opinion Over Bank Action
Jul 3, 2016 10:35 AM
By Rapaport News
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RAPAPORT... Shrenuj & Co., a Mumbai-based diamond and jewelry
manufacturer, is challenging an order by India’s second-largest bank to seize
its assets and restrict the travel of its promoters.
ICICI Bank on May 16 appointed a receiver for Shrenuj Far
East Limited, the company’s Hong Kong subsidiary which has a $15 million credit
limit with the bank, Shrenuj said in a note to the Bombay Stock Exchange (BSE).
ICICI then pursued an order from
India’s debt recovery tribunal to add Indian inventories to the assets that
Shrenuj Far East had already given up to the receiver.
“In its apparent over-enthusiasm, ICICI Bank Limited
approached the DRT-III [debt recovery tribunal] in India and sought an ‘ex-parte’
order for attaching all the inventories in India and placing restrictions on
the international movement of the promoters,” Shreyas Doshi, chairman of Shrenuj,
said. “This order was sought on frivolous grounds, far from the factual
situation.”
Doshi, along with group executive director Vishal Doshi,
were named by The Economic Times as the people who have been prevented
from leaving India. He stressed the bank’s action will not impact the company’s
current operations but it does jeopardize the rights of the other 18 banks who
form the lending consortium in India.
“The company is in the process of seeking a legal opinion to
challenge this ex-parte decision of DRT-III and take remedial measures,” Doshi
said.
The news followed Shrenuj’s decision to “rationalize” its
workforce after annual revenue slumped 34 percent and the company swung to a
loss. The gem cutter has faced “severe liquidity pressure,” accountants
Rajendra & Co wrote in an independent auditors’ report May 28.
ICICI Bank did not immediately respond to a request for
comment. The BSE has requested further clarification from Shrenuj about the
matter.
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Tags:
Banks, finance, ICICI Bank, India, lending, manufacturers, manufacturing., mumbai, Rapaport News, Shrenuj, Shrenuj & Co.
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