Ad Here  
May
June
July
August
September
October
 
 
Hindalco – re-rating AL secures orders for 3600 buses Tata Motors bets on new launches Right to privacy – now it’s fundamental! Hyundai India achieves 7 mn production at Chennai factory Daimler grows sales and share in India Housing demand revival From the toughest to the best year ITC chairman calls for policy impetus to transform agriculture L&T bags the Mumbai Trans-harbour link order Tata Motors joins compact SUV bandwagon with Nexon The gainers and the losers New India Assurance posts impressive show Maruti – for young buyers Tata Motors aims to be among the Top 3 global CV & PV firm Sundram Fasteners rejigs international Hyundai to focus on SUVs and AMT variants Land wars Daimler’s truck exports from Chennai cross 5000 units Tata Steel, ThyssenKrupp sign MoU to merge European units Record two-wheeler sales LVB posts 31 per cent growth in Q1 net profit AL wins Deming prize again IOB on turnaround path Smooth sailing of SAIL RoC in the dock... TN government keen on revival of operations at Nokia complex Is this a generation gap? L & T’s floating dock for navy Sivasankaran enters taxi space to take on Uber and Ola Shriram Life clocks more than Rs.1000 crore premium in 2015-16 PSU non-life firms seek to protect share When small is not so beautiful… Toyota and Suzuki to introduce EVs in India by 2020 Carnival Films acquiring 3000 screens pan India Aurobindo Pharmacy: good turnaround Kone India eyes further growth in elevator market A welcome initiative-even critics are recognised Chinese smart phones flourish in small towns too! AL introduces Guru & Partner Solar installations exceed 2015 capacity in five months Singur minus Nano – victory or folly? Ponni Sugars (Erode) Ltd: not so sweet 2012-13 Michelin to double Chennai capacity Preparing for the next growth curve PPP model for infrastructure development Nissan exit shouldn’t affect ALL Back in growth mode L & T set bigger ambitions in defence business Emami – a new growth mantra Eyes strong growth in 2016-17 Forging industry worried over lower supply of steel and its price It takes two to tango CAPITAL NOTES He excels in the nuts and bolts of entrepreneurship Tata Motors charts investments in PV and CV businesses Dish TV – subscriber additions encouraging Consolidating leadership position in smartphones TI Cycles plans retail expansion to drive sales for premium bicycles Bajaj Finserv – Q1: fare well Welcome focus to improve rural India... A niche in FMCG business... L&T profit up by 11 per cent TVS Automobile invests Rs.75 crore in start-up firms Increasing market share HPCL plans Rs.61,000 crore capex over 5-years Titan Company – sales recovery to kick in 29 per cent jump in TCS revenues Yamaha unveils scooter boutique E.I.D Parry (India) Ltd: another sweet year M & M unveils driverless technology for tractors TVS Srichakra plans capacity expansion Last stages Vellayan is back, after 150 days Ode to Ratan Tata V-Guard launches app-enabled water heater system Are they really independent? Rane targets Rs.5500 crore topline by 2018-19 Smartphone onslaught by Chinese brands Mercedes-Benz sales continue to zoom Tata gets 4-star rating for Zest Gamesa to set up a plant in Nellore ITC – steep excise hike Wabco launches safety system The unexpected exit
 
Last stages
A pioneering company goes up in smoke

In 1973, a thirty something Citibank officer, Faroukh Irani, teamed up with Chennai’s money bag, A C Muthiah, to found India’s first ever leasing company.  Muthiah had a bigger equity stake but Irani was the business’s boss.

In 1988, the company began its walk into trouble. First, it forked out Rs 170 crore to depositors when Mercantile Credit Corporation (MCC), a Muthiah company, faced financial trouble. This was never reported to the banks.  Next, there were issues with a Singapore-based subsidiary. Trouble accentuated thereafter following an over reliance on short-term funding and a wanton asset-liability mismatch. Worse still, the 1990s diversification forays into mutual funds, consumer credit profiling, etc., floundered.  Two IIM dons who joined the mutual fund left, unhappy with Irani’s policy of breathing down their neck.

When the financials really went for a toss, the RBI directed the company to cease transacting any business and barred it from disposing its assets, incurring new liabilities or declaring dividends. Meanwhile, State Bank of India probed Irani of suspicious dealings with funds of the company. He apparently admitted to a Rs 1000 crore hole in the balance sheet with liabilities outstripping assets by that amount.  Soon the company placed its books under both special audit and forensic audit. When the preliminary report was out, Irani refused to play ball.  Along the way, the company’s statutory auditors, Sarathy and Balu, resigned after stating that audit reports issued by them regarding the financial statements of fiscal 2013 should not be relied upon. Sundaram and Srinivasan, Chartered Accountants, were appointed by the Board to conduct the special audit of the company for the last five years. The company wanted to submit revised financial statements for 2013. The Board decided to take civil and criminal action against persons whom the forensic audit may identify. Irani submitted his resignation and so did Muthiah.

While Irani accused Muthiah of forging his signatures, Muthiah says the company’s woes happened right under Irani’s nose. Irani claims that he is a whistleblower and has nothing to benefit from the malpractice, as his shareholding is less than 0.3 per cent. He further claims that the accounts have been tampered with without his knowledge.

ICICI Bank has now filed a petition for winding up of the company.

Author :
Reported On :
Sector :
Shoulder :
RELATED NEWS
ABOUT IE
IE, the business magazine from south was launched in 1968 and pioneered business journalism in south. Through the 45 years IE has been focusing on well-presented and well-researched articles. When giants in the industry stumbled to keep pace with the digital revolution, IE stayed affixed embracing technology.
Read more
 
PRIVACY POLICY
Economist Communications Ltd is committed to ensuring that your privacy is protected.
Read more
TERMS AND CONDITIONS
You agree that your use of this Website and the purchase of the magazine will be governed by these terms and conditions.
Read more
 
CONTACT US
S-15, Industrial Estate,
Guindy,
Chennai - 600 032.
PHONE: +91 44 22501236
EMAIL: indecom1968@gmail.com