MUMBAI, APR 10: Following a default of Rs 9 crore by Amitabh Bachchan's ailing company AB Corp Ltd, government-owned Canara Bank has moved the Mumbai High Court seeking permission to attach his famous Juhu bungalow - Pratiksha - to recover its dues. The petition will come up for hearing on Monday after it was adjourned on Friday.While a faxed questionnaire sent few weeks back to the mega-star and his CEO Gautam Beri seeking financial details did not elicit any response, an official at Pratiksha said that Bachchan is out of India and will be back only next week.The bank seeks to attach Amitabh's bungalow as loss-making AB Corp (formerly Amitabh Bachchan Corporation Ltd) was referred to the Board for Industrial and Financial Reconstruction (BIFR) on March 22, to escape the appointment of the Court receiver on March 17 for taking possession of the company's assets. Once a company is in BIFR fold, it need not to pay back the owed funds to the banks and financial institutions until the BIFR comes up with arehabilitation package - which usually takes years to materialise.Besides Canara Bank, AB Corp owes money to host of other public sector banks including Central Bank of India which had invested in its debentures and lost money.Canara Bank officials swung into action after they discovered that due to real estate crash, the value of properties mortgaged with them has depreciated as compared to the company's liabilities of Rs 9 crore. Hence, the plans to attach the bungalow at Juhu, valued at Rs 12 crore at today's real estate rates.In its suit, Canara Bank has charged AB Corp chairman Amitabh Bachchan and Vice Chairman Jaya Bachchan for the non-payment of bank advances provided by way of open-cash credit facility of Rs 2.4 crore, overdraft against book debts amounting to Rs 5.6 crore, foreign letter of credit comprising Rs 2.5 crore and guarantee facility worth Rs 3.5 crore.According to the bank, AB Corp has not paid the principal amount as well as the interest accrued on it. As on March 31, 1998,the company's total liabilities to its various debtors was as high as Rs 80 crore.As the company's board has some political heavy weights, Canara Bank till date was hesitant on taking action against the company. It was also rumoured that a Lucknow-based finance firm had picked up some stake in AB Corp, though both the companies have not confirmed these reports. At present, AB Corp is operating from this finance company's Goregaon office in Mumbai.The banking industry sources were aghast at the way public sector banks, led by Canara Bank, had financed AB Corp's projects without doing a proper due diligence. The private placement of ABCL's shares was done at a very high premium of Rs 70 per share by Kotak Mahindra even though it was a first venture of this kind with a fatal combination of the vagaries of Indian film industry.AB Corp made huge losses from its second year of operations and the Miss World pageant held in Bangalore sealed the company's fate. Bachchan's total reliance on the theninexperienced management, led by one former Hindustan Lever executive, was the last nail in the company's coffin.
