Videocon-BPL tiff over Uptron stake

BPL Limited opposed VIL8217;s bid on the ground that VIL failed to contribute Rs 7.5 crore immediately on sanctioning the rehabilitation scheme in April 1996 or within the time schedule.

Despite being aware of its obligations towards the sick company, VIL did not pump in the requisite funds on fear of whether the sick company would ever revive, BPL alleged at a review hearing of the Board for Industrial and Financial Reconstruction BIFR.

According to the sanctioned scheme, BPL and its associates were to contribute a sum of Rs 71.25 crore within a time-bound schedule to meet a part of the cost of the scheme. BPL was recognised as the propounder of the scheme and theobligation to fulfil any shortfall towards the funds to be infused had to be met by BPL which they had done.

The sanctioned scheme had envisaged that fresh equity would be raised in BDDL with BPL picking up 1.934 crore shares at par by bringing in Rs 19.34 crore, VIL taking up 75 lakh shares at par by bringing in Rs 7.5 crore and Toshiba taking up 37.5 lakh shares at par by bringing in Rs 3.75 crore.

Videocon submitted that it had written letters to both BPL and Uptron Picture Tubes requesting for expeditious steps to be taken for inducting its share of Rs 7.5 crore. At the same time, the company said that it has not deposited the money either by cash or cheque on or before the stipulated date 8211; March 31, 1997.

At the same time, VIL referred to an agreement dated November 11, 1994 signed between the chairmen of BPL and VIL indicating that out of the total equity of Rs 51.9 crore, BPL8217;s share would be 51.25 per cent and that of VIL 10.02 per cent. The agreement also included the provision that VIL wouldnot seek further equity in any future equity issue or take any guarantees or make any further investment other than the present equity.