BIFR declares Sunstar Lubricants sick

The BIFR order comes in the wake of SLL’s net worth of Rs 18.46 crore being wiped out by accumulated losses of Rs 26.44 crore.

Directing SLL to allow IFCI access to all information, including inspection of the plant, the board said the OA would get the valuation of the company’s assets through a reputed firm of chartered engineer or chartered accountants.

The board also directed the OA to pay special attention on the aspect of managerial competence of the promoters and executive level and suggest improvements.

IFCI has also been asked by BIFR to suggest cost reduction measures for SLL’s rehabilitation.

BIFR has also directed sll promoters to submit their comprehensive rehabiliation proposal with the means of financing fully tied-up along with audited balance sheet and profit and loss accounts for 1998-99.

The company had submitted to BIFR its balance sheet for the period ending March 31, 1997.

The board has also directed SLL to route their sale proceeds through consortium banks, who would appropriate 5 per cent from the sale proceeds and release 95 per cent to the company for its operations.

"The company/promoters would immediately close their accounts with banks other than the consortium banks," the board said.

Earlier in its submission to the BIFR bench Canara Bank representative had alleged that SLL was not routing their sale proceeds through the consortium banks and had reportedly opened accounts with other banks.

The consortium of banks included Canara Bank, Andhra Bank, Standard Chartered Bank, HongkongBank and State Bank of Indore.