SEPT 12: The Madras High Court has appointed its official liquidator as Provisional Liquidator of MCC Finance Ltd (MCCFL), a firm of the M A Chidambaram Group of companies, on the ground that the present state of affairs of MCCFL warranted such an appointment.The appointment was made by Justice R Jayasimha Babu on company petitions from various quarters, including RBI, seeking winding up of MCCFL and appointment of a provisional liquidator for the company. The Judge also appointed former chairman of Bharat Overseas Bank S Srinivasan as administrator of the firm with immediate effect.The Judge observed that the estimated realisable value of Rs 60 crore given by the company was far below its liabilities which aggregated about Rs 300 crore.The petitioners also sought an order to restrain the directors of the company from encumbering, transferring, alienating and disposing of any of the firm's assets pending disposal of the petitions.They said it was most unfortunate that about Rs 171.72 crore of the Rs 200 crore invested in the company by about 50,000 depositors was practically irrecoverable having been lent to 10 investment companies, set up by MCCFL, without undertaking a proper credit assessment of the investment firms.Directing the employees of the company to fully cooperate with Srinivasan and render all assistance to him, the Judge told all those connected with the company, including the Board of Directors and advisers, to surrender all books, records and other assets in their possession or under their control to the provisional liquidator.Appointing auditors Venkatesh & Co to go through books and records of the company, Justice Jayasimha Babu asked Tamil Nadu's Additional Director General of Police (Economic Wing) to treat a report forwarded to the police by the RBI, regarding apparent fraud committed by those incharge of the firm, as the First Information Report.He also directed interrogation of those who were directly or indirectly incharge of MCCFL and told the authorities concerned to take action against those involved in the alleged conspiracy to siphon off and divert company funds.MCCFL was born out of the 1997 merger of Excel Finance Ltd, Foresight Financial Services Ltd and Cameo Share Registry Ltd with Mercantile Credit Corporation of which the late M A Chidambaram was its first chairman.
