Court orders liquidation of Alpic Finance
By Our Banking Bureau | 29 Aug 2002
Mumbai: The Bombay High Court has ordered the liquidation of Alpic Finance in response to a winding-up petition filed by the Small Industrial Development Bank of India (SIDBI).
Under the liquidation proceedings secured, creditors like banks and financial institutions may get a chance to salvage some of the investments, but thousands of depositors stand to lose money. The secured creditors enjoy first charge over the assets.
Alpic Finance has 34,729 bondholders, who had invested around Rs 60 crore, while thousands of fixed deposit-holders had put in close to Rs 41 crore as on June 2000.
SIDBI, one of the investors with an outstanding of Rs 10 crore, had moved the court against Alpic Finance after the non-banking finance company defaulted.
Out of the six bond series floated by the company, five were secured, while the last issue of safety bonds was unsecured. The total loans given by the secured creditors, including IFCI, Bank of Baroda and SIDBI, stood at Rs 53.9 crore as on June 2000.
Market sources say recovery from liquidation may be inadequate to meet the dues of secured creditors. Besides, Alpic Finance employees have pari-passu charge over the proceeds.