Kuber gets two years reprieve

MUMBAI/NEW DELHI, FEB 4: The Company Law Board has directed defaulting nidhi company Kuber Mutual Benefits Ltd to repay the money to its d...

MUMBAI/NEW DELHI, FEB 4: The Company Law Board has directed defaulting nidhi company Kuber Mutual Benefits Ltd to repay the money to its depositors in the 8220;next two years8221;. CLB member C R Mehta in a suo-motu order directed Kuber 8211; which defaulted on repayments last year 8211; to repay the deposits, collected under different schemes, which have already matured and the deposits which would be maturing in future. However, investors were skeptical about Kuber paying back funds within the stipulated time. 8220;Other finance companies which defaulted on repayment still continue in default,8221; said an investor, adding, 8220;investors are yet to get back funds from CRB, Prudential, JVG Finance and Helios.8221;

According to the CLB repayment scheme, deposits up to Rs 5,000 has to be re-paid within the next three months. Deposits between Rs 5,000 and Rs 10,000 have to be returned in two equal six monthly instalments, ie by end of year 2000.

While deposits between Rs 10,000 and Rs 15,000 has to be paid in three six monthlyequal instalments and for deposits over Rs 15,000, repayment is to be made in four equal six monthly instalments.

As per the CLB directions, entire amount of Rs 100 crore in the form of various deposits has to be re-paid by Kuber by the end of 2002. However, the order said the repayment scheme would be subject to any modification being ordered by Delhi High Court, which has received various public interest litigations against Kuber.

CLB order said Kuber has to pay interest rate on these deposits at the contracted rate up to the date of maturity and after that the company has to pay 12.5 per cent interest rate annually till the actual payment. But the entire interest rate to the depositors will be paid along with the last instalment.

Kuber started defaulting in repayment in October-November 1998 after Delhi High Court restrained the company from selling its assets except in the normal course of business, and following a sudden mass move by large number of depositors for withdrawal of their deposits. Inaddition to it, the economic slowdown and imbalance in the inflow and outflow of funds also affected the repayment. Before CLB, the company counsel said that the RBI had carried out the inspection of Kuber and found that it had assets more than its liabilities.