BIFR declares ABCL sick

ABCL officials said after the hearing they would be meeting IDBI shortly for preparing the rehabilitation package. BIFR8217;s two-member bench comprising NP Bagchee and NP Singh, heard the case of the company.

Top officials of ABCL including its chief executive M Ajayan were present in today8217;s hearing. However,mega star Amitabh Bachchan, who is chairman of the company, was not present during the hearing. Others present in the hearing included ABCL creditors Canara Bank and Allahabad Bank.

BIFR sources said Canara Bank has asked the board to allow Mumbai High Court to appoint a court receiver for taking over the superstar8217;s bungalow and two flats in Mumbai. The Mumbai HC had last month asked Canara Bank to obtain consent of BIFR for appointment of a court receiver and launch proceedings in its suit filed against ABCL for recovery of Rs 10 crore advanced as loan.

Sources also said that the creditors of ABCL had objected to the sickness of the company as it was not engaged in manufacturing activities. Under the Sick Industrial Companies Act SICA 1985, only companies engaged in manufacturing activities can be declared sick. Also according to SICA, if a company has been registered with the BIFR, no creditor can have right over the assets of the company.

Meanwhile, cinestar Amitabh Bachchan today said efforts arebeing made to restructure and pump back life into his debt-ridden AB Corp Ltd. Barely a few minutes after his mega entertainment venture was declared sick by the BIFR, Bachchan said here, 8220;We are trying to restructure the operations of ABCL and put it back on track.8221;

However, he refused to divulge details on the internal restructuring being planned for the company, which had an accumulated loss of Rs 70.82 crore on September 30, 1998. 8220;I can not talk about it now.8221;

He also refused to state whether there were any efforts to move out of the entertainment industry. However, pursuant to the BIFR hearing on ABCL, company chief executive Ajayan stated that ABCL will continue to be in the entertainment business and will increase its presence in a big way. 8220;Fortunately, interest burden is only about Rs 1 crore a year. We will only have to manage the company better.8221;

ABCL, which is now trying to make a Phoenix like comeback, was floated by the mega star in association with his wife Jaya Bachchan as anentertainment software company to venture into various activities of film production, audio cassettes and event management. Billed as a prestigious venture, ABCL hit a rough patch after the much-touted Miss World Pageant in 1996 failed and a series of films bombed at the box office. The Miss World fiasco had led to a default of Rs 18 crore to Prasar Bharti.

ABCL had approached BIFR in March 1999 for declaring it a sick company claiming its net worth was completely eroded by accumulated losses. On April 16 last, the Mumbai High Court had restrained Amitabh Bachchan from selling off his Mumbai bungalow Prateeksha8217; and two flats till the pending loan recovery cases of Canara Bank were disposed of.