The Telegraph
Friday , April 25 , 2014
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Tata takeover hope for Incab

Revival prospects of the ailing Incab Industries got a major boost on Thursday with Delhi High Court giving its verdict in favour of Tata Steel, one of the prospective bidders.

Sources in the union said that the high court’s order had withheld the decision of both the Appellate Authority for Industrial and Financial Reconstruction (AAIFR) and Board for Industrial and Financial Reconstruction (BIFR). The statutory bodies, which help revive sick industries, had earlier approved Tata Steel’s takeover proposal.

“We are happy that the verdict is in favour of Tata Steel. SBI, the operating agency, had found the company’s bid suitable and had, therefore, recommended it to the BIFR in 2009. The court order will streamline the revival process,” said Aloke Sen, the assistant secretary of Incab Employees’ Association, Calcutta.

All eyes are now set on the May 7 BIFR hearing. Employees and union functionaries of Incab’s Calcutta-based headquarters are optimistic of a positive outcome. “We are hopeful that the BIFR will come up with an advertisement declaring the name of the promoter on that day,” added Sen.

A media release issued by Tata Steel confirmed the high court development.

“The Delhi order is against the writ filed by RR Kabels and Pegasus challenging the order of AAIFR,” said a company spokesperson in the note. He added that the court by its order had also held that the technical point of composition of the bench constituted by BIFR, as raised by the petitioners, was not tenable.

Once a blue-chip company, Incab Industries has been lying shut for the past 14 years. It was referred to the BIFR in 1999 and since then efforts have been on to revive the ailing unit. Although the board recommended Tata Steel’s name, legal tangles delayed the process.

The steel major had submitted its financial package (read detailed rehabilitation scheme) for reviving the company in 2007. In 2009, the BIFR approved the proposal finding it more suitable than those of the other two bidders — RR Kabels and Pegasus Assets Reconstruction Company, both based in Mumbai — and recommended Tata Steel to the operating agency.

The AAIFR too upheld the BIFR decision in favour of Tata Steel in December 2012, but RR Kabels and Pegasus moved Delhi High Court, challenging the decision.

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