Escorts Communications out of BIFR net

"We find that the company had succeeded in making its networth exceed the accumulated losses and thereby ceased to be a sick company," a two-member bench of BIFR said in a recent order.

The company was taken out of the purview of BIFR after Escorts filed an audited balance-sheet as on February 29, 2000 after the conversion of share application money of LGIL into paid-up capital along with the report of auditors for its consideration.

Escorts group, which was earlier planning to merge the ailing company with itself, dropped the plan after LGIC showed interest in picking up the stake. Earlier, Escorts Communications representative had submitted before the bench that networth of the company was positive if the share application money was considered a part of networth and added that the company would soon submit audited balancesheet after converting share application money into paid-up capital.

The board, however, turned down the plea and asked the company to submit its balancesheet. LGIC and Escorts together have bid for a Department of Telecommunications tender for wireless in local loop, field trials of which have been approved by the DoT, he said.

Incorporated in 1994, Escorts Communications, makes communications equipment like cables, PABX systems and wireless in local loop (WLL).

The PABX business of the company had not been doing well. In an effort to turnaround the company, Escorts had embarked on a restructuring, downsizing the workforce by 45 per cent.