Lenders, with an exposure of Rs 40,000 crore in Bhushan Steel, are in talks to appoint a management agency to monitor the operations of the company and safeguard the interest of banks.
The move by banks follows the arrest of Neeraj Singal, vice chairman and managing director of the company, by the CBI in connection with an alleged Rs 50 lakh bribery case involving Syndicate Bank chairman SK Jain.
“SBI has an exposure of Rs 6,000 crore in the company. We are in talks with other banks, including Punjab National Bank which is the consortium leader for term loans, to appoint a management agency to handle day-to-day affairs. Banks may approach the board of the company with the proposal,” SBI chief Arundhati Bhattacharya said. SBI heads the consortium for working capital loan.
She said when there was an accident in the company earlier, the consortium had advised a safety advisor on board and this was done by the company. “Even in this case I don’t think the borrower would have any objections,” she said.
- Soon You Could Get Plastic Currency Notes: Find Out More
- Ranveer Singh and Vaani Kapoor Starrer Befikre Gets A Thumbs Up
- Supreme Court Seeks Centre’s Response Over Various Issues Regarding Demonetisation
- Defence Minister Manohar Parrikar Writes To West Bengal CM Mamata Banerjee
- Bigg Boss 10 December 8 Review: Swami Om Feels Cheated, lashes Out At Gaurav For Jail Punishment
- South Korean President Park Geun-Hye Impeached Over Corruption Scandal
- Former Air Chief SP Tyagi Arrested In VVIP Chopper Scam
- After Congress Vice President Rahul Gandhi, Liquor Baron Vijay Mallya’s Twitter Account Hacked
- Find Out What PM Narendra Modi Told Cabinet Over Demonetisation Decision
- Home Minister Rajnath Singh Assures Safety Of All Tourists Stranded On Havelock Island
- Government To Waive Service Tax On Debit, Credit Card Transactions Of Up To Rs 2,000
- President Pranab Mukherjee Criticises Parliament Disruptions Over Demonetisation
- Pakistan International Airlines Flight Carrying Over 40 Passenger On Board Crashes
- Shah Rukh Khan On Raees Clash With Kaabil: It’s Impossible To Have A Solo Release In India
- US-President Elect Donald Trump Named TIME’s Person Of The Year 2016
Ruling out any problem with their exposure, Bhattacharya said, “The company’s assets are of good quality. We don’t expect any problem with that… operations of the company are not affected. We’re not thinking of a financial audit at this point of time.” Its long-term borrowings were at Rs 21,664 crore while short-term debt was Rs 5,232 crore as on March 31, 2013. If the company’s operations are affected, it will default on repayments. This will create a big headache for banks which are already reeling under heavy bad loans.
The SBI chief also ruled out the takeover of the management of the company. “It’s a tedious process. It’s not easy to take over the management of a company.”
Bhattacharya said the bank has no plans to change its loan sanction process in the wake of bribery charges at Syndicate Bank. “There’s no policy change. We accept proposals and adopt strict due diligence while processing the loan applications. It (Syndicate Bank chairman’s arrest) seems to be an aberration. It should be treated as an incident at an individual level,” she said.
For the year ended March 2014, Bhushan Steel reported a net profit of Rs 61.96 crore on net revenues of Rs 9,675 crore. It has three steel plants in Orissa, Maharashtra and Uttar Pradesh. The promoters hold 71.29 per cent stake as per the BSE website. Meanwhile, shares of Bhushan Steel tumbled 10 per cent to hit its lowest trading permissible limit for the day of Rs 219.35 on the BSE. In the previous two trading sessions, the stock had fallen by 20 per cent. Its market valuation has fallen by Rs 3,655 crore to Rs 4,968 crore in just three days.