Ailing AB Corp networth eroded

MUMBAI, Oct 7: The net worth of AB Corp Ltd formerly Amitabh Bachchan Corporation which notched up whopping losses of Rs 36 crore has e...

MUMBAI, Oct 7: The net worth of AB Corp Ltd formerly Amitabh Bachchan Corporation which notched up whopping losses of Rs 36 crore has eroded during the 18-month period ended September 1997. The auditors of the company have also made several observations about the company8217;s accounts for the last financial year.

The net worth of the company 8212; which has an equity base of Rs 32.87 crore 8212; works out to Rs 35.77 crore. But this has been wiped out after the disastrous performance last year. The company, which was launched with ambitious plans to capitalise on the brand image of Amitabh Bachchan, has taken secured and unsecured loans totalling Rs 27.34 crore from banks and financial institutions.

According to the company8217;s auditors, Jayantilal Thaker and Company, ABCL quot;should strengthen and extend its internal audit system to all areas of its operations to make it more commensurate with the size of the company.quot; The company has since then taken many steps to change its accounting procedure.

When contactedby The Indian Express, company officials did not clarify the financial position of the company. A questionnaire faxed to the company8217;s chairman and CEO also did not elicit any response.

8220;The company has not complied with the provisions of Section 205 A of the Companies Act in as much as the amount of Rs 29,284,659 out of the dividend for the accounting year ended 31 March 1996 was neither paid nor was it transmitted to a special account with a scheduled bank within the prescribed time limits under the said section,8221; the auditors said.

The company has now shifted its offices to the office complex of a UP-based group in a bid to reduce costs. There are also unconfirmed reports that this UP-based group, which is engaged in airline, construction, finance and major resort project in Maharashtra, has acquired a stake in AB Corp.

Many public sector banks, including Canara Bank and Central Bank of India, participated in the company8217;s highly priced private placement issue at Rs 95 per share. The privateplacement was made in April 1997 which increased the company8217;s equity capital to Rs 32 crore. The company8217;s shares are not listed on the stock exchanges.