NEW DELHI, June 18: The decision regarding the repayment of deposit money to investors by Hoffland Finance Limited (HFL) has been deferred as HFL directors failed to appear before the Company Law Board (CLB) despite summons issued to them. In its hearing yesterday, CLB said it was unable to take any decision due to the absence of the directors of the company. The next hearing has been scheduled for July 27.HFL had in April this year sought permission of CLB for approving the scheme for repayment of deposits to the investors of the company. In a written communication to CLB, HFL had provided two options for payment of deposits beginning August 1998.The hearing had been held yesterday for approving the scheme. No decision could be taken during the hearing as directors had not submitted the affidavit for claiming responsibility for repayment. Apart from it no representative from the company appeared before the board.According to sources, summons order has come back to CLB and the board is likely toissue fresh order at the residence of HFL chairman B B Sharma. The Hoffland Investor Forum, Consumer Education Research Centre (CERC) and large number of depositors attended the hearing. HFL which has already been booked under Section 58-A of the Companies Act has stated in its earlier hearing before the board in February that the money raised by it were loans against securities and not fixed deposits. Following this CLB asked for a detailed reply from HFL in this regard.Under option one of the scheme HFL has said five per cent of the principal amount will be paid in first quarter beginning August 1998. While 10 per cent, 15 per cent and 20 per cent of the amount will be paid in second, third and fourth quarter respectively. The balance 50 per cent of the amount will be paid in two equal installment during fifth and sixth quarter.In case of second option, 50 per cent of the principal will be paid after two years, ie, in second quarter of year 2000 and the balance in the third quarter of the same year.Under this option investors will be paid interest but only in the fourth quarter of 2000.The company had claimed generating sufficient resources by selling real estate, realisation from debtors and through fresh business after August 1998. The total deposits raised by HFL is Rs 40 crore which include Rs 20 crore each of secured and unsecured deposits and the scheme is for unsecured deposits only.
