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Subhiksha books: Govt to look into suggestions

Source: PTI
June 09, 2009 19:38 IST
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The government said on Tuesday it will examine the recommendations of the ministry of corporate affairs' southern regional director for inspecting accounts of cash-strapped retail chain Subhiksha on the ground of alleged mismanagement of funds.

"We will look at it. These are autonomous and routine functions. If the recommendation has been made, it will be examined," corporate affairs minister Salman Khursheed told reporters.

He, however, said the ministry will not set any time frame for examining the recommendations. "But, we expect the matter to be dealt expeditiously," he added.

MCA's southern regional director had earlier recommended inspection of accounts of Subhiksha, alleging mismanagement in the finances of the company.

The regional director in a letter to the ministry had suggested that they should order an inspection under Section 209 A of the Companies Act, 1956 as he has received complaints of financial mismanagement in the firm, sources said. Earlier, MCA had sought the opinion of the regional director on this.

Section 209 A empowers the Registrar of Companies under the ministry of corporate affairs to inspect books of accounts of any company.

Subhiksha is undergoing a corporate debt restructuring programme to make the cash-strapped retail chain eligible for receiving funding to re-start its operations.

The R Subramanian-promoted chain has closed down all its around 1,600 outlets across the country due to severe liquidity crunch and has earlier said it required funds to the tune of Rs 300 crore (Rs 3 billion) to re-start operations.

A case is also pending against the retail firm in the Madras high court regarding its merger with Chennai-based firm Blue Green Constructions.

Earlier, some of the company's shareholders, including ICICI Ventures, had alleged Subramanian of not being clear regarding the firm's accounts.

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