NEW DELHI, APRIL 15: Modistone Ltd has been declared sick for the second time in the last three years by the Board for Industrial and Financial Reconstruction (BIFR).BIFR on Wednesday appointed Industrial Finance Corporation of India (IFCI) as the operating agency (OA) to decide the fate of the company jointly managed by chairman B K Modi and vice-chairman V K Modi. Modistone was referred to BIFR in February. The promoters have been directed to present a rehabilitation proposal for the Mumbai-based company within eight weeks which will then have to be evaluated by IFCI within six weeks.Modistone has claimed that it has been incurring losses in last two years due to adverse market conditions as the demand had shifted from cross-ply passenger tyres to radials.Modistone reported a loss of Rs 70.70 crore for the 18 months ending September 30, 1997 as against Rs 23.03 crore for the 12-month period ending March 31, 1996. While sales declined by a mere 9 per cent during the period, gross losses had mountedby a huge 421 per cent. The company's auditors have pointed out no provisions had been made in the accounts for amounts totalling Rs 17.11 crore.
