The Hindu : Business : Standard Motors assets auctioned

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Thursday, Nov 25, 2004

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Business

Standard Motors assets auctioned

By Our Staff Reporter

CHENNAI, NOV. 24. The 58-acre land, machinery and scrap belonging to Standard Motor Products of India Private Limited, which is under liquidation, was today auctioned for Rs. 140 crores in the Madras High Court.

The matter relating to the company reached the High Court for liquidation after it became sick in 1989. A couple of months back, Justice S. Ashok Kumar, ordered the sale of the company, following which 11 bidders participated in a tender. Yesterday it was concluded in favour of a person from Andhra Pradesh, who was awarded the tender for a sum of Rs. 135 crores.

However, advocate Ezhil, representing the Coimbatore-based Hindustan Group of Companies, told Justice K. Ravirajapandian, before whom the matter came up for approval, that certain irregularities had taken place in the tender process. When the Judge offered to oversee a fresh bidding process in the open court itself, T. S. R. Kannaiyan of the Hindustan Group offered Rs. 140 crores for the sick unit and its assets. It was concluded in his favour.

Mr. Kannaiyan has paid Rs. 6.30 crores as earnest money deposit, and will pay 10 per cent of the balance amount in two weeks. The balance will be paid in two instalments within two months.

According to Mr. Ezhil, while the salary liability was up to Rs. 30 crores, the company owed more than Rs. 100 crores to banks and unknown sum to many other creditors.

Once the entire sale proceeds were deposited with the Official Liquidator within the specified period the court would draw a scheme to apportion the sum to serve all liabilities, he added.

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