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