Govt may supercede Lloyds Finance board

By SiliconIndia   |   Monday, 26 January 2004, 08:00 Hrs
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NEW DELHI: Government is believed to have decided to place its own directors, including representatives of fixed deposit investors' forum, on the board of Mumbai-based Lloyds Finance after the company's repeated failure to repay dues of its fixed deposit holders.

The Company Law Board (CLB) is also believed to have ordered supercession of the board of directors of Lloyds Finance but in a novel approach, it has decided to place nominees of defrauded investors on the new board, sources said on Monday.

A non-banking finance company, Lloyds Finance, has time and again failed to implement the CLB directive in repaying investors, even after CLB's western region branch in Mumbai specifically directed it to comply with the repayment order.

Lloyds paid its depositors the first installment of the rescheduled loan amount after a delay of over six months in 2000 but no payments have been made till date after this tranche, sources said, adding that CLB had allowed it between two to five years to repay the outstandings, depending on each loan amount.

In May 2001, the company informed its depositors that CLB had rescheduled the payment, based on a representation by it. The revised schedule showed that deposits up to Rs 5,000 could be repaid in six instead of the earlier three months.

For deposits between Rs 5001-10,000, the company could repay at 20, 25, 25 and 30 per cent over four years while for sums beyond the specified range, the company was allowed five years.

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