NEW DELHI, May 22: The Delhi high court has ordered the appointment of an official liquidator to take charge of the assets of the beleaguered CRB Capital Markets and restrained the the management of the company from disposing of any of its assets.

The orders were passed by justice MK Sharma on Thursday on a winding up petition filed in the Delhi high court by the Reserve Bank of India (RBI).Justice Sharma, while issuing notice to the company, whose chairman CR Bhansali has reportedly fled to Canada, has fixed the next date of hearing of the petition on July 22.

Reserve Bank counsel HS Parihar said that as per the court directives, the official liquidator has been permitted to take the help of the police in taking charge of the assets, books of accounts and other valuables of the company involved in financial frauds amounting to hundreds of crores of rupees. The company's outstanding dues are more than Rs 600 crore.

Parihar said that no one appeared on behalf of CRB and that legal notices would be served at the registered office of the company.

Appearing on behalf of RBI in the high court, senior advocate Arun Jaitley, along with Parihar, contended that it was an extraordinary case of banking fraud and that the company had taken numerous unsecured loans from various banking institutions and was trying to dispose of its assets.

He also informed the court that CBI was inquiring into the matter as to how State Bank of India (SBI) could advance an unsecured loan of Rs 58 crore to CRB Capital Markets, which has its registered office at Punchkuian Road in the capital.

He said the Gujarat government has also written to the central bank about loans advanced by various cooperative banks in the state to the company of about Rs 50 crore.

The total market liability of the company amounted to over Rs 400 crore.

The Reserve Bank petition pointed out that the company's total amount of deposits outstanding as on March 31, 1997, was Rs 186.38 crore.

The central bank also annexed a list of credit exposures in various banks involving CRB group as on May 16, 1997, which shows that State Bank's credit to the company was highest at Rs 58.09 crore, followed by Bank of Tokyo (Rs 7.42 crore), Bank of Rajasthan (Rs 4.5 crore), Bank of Baroda (Rs 4.12 crore) and Bank of India (Rs 4.11 crore).

In the circumstances, "Reserve Bank is satisfied that the continuance of the CRB Capital Markets, a non-banking financial company, is detrimental to public interest and also detrimental to the interest of the depositors of the company," the petition said.

Jaitley pointed out that Gujarat finance minister Atmarambhai M Patel had written to RBI governor C Rangarajan saying "a large number of cooperative banks have placed deposits with the CRB group, a non-banking finance company with a network more than Rs 430 crore and sound finances. The total outstanding dues against said company is above Rs 600 crore."

Patel had requested the central bank to pass orders for the repayment of large amount of dues to the cooperative banks, whose survival and existence was in jeopardy.

"How did the company having assets worth just Rs 133 crore could manage so much of loans?" justice Sharma exclaimed.

CRB Capital Markets was incorporated on May 16, 1985, under CRB Consultants (Pvt) Ltd, which became public on March 4, 1991.

The central bank, after receiving several complaints about non-payment of deposits and fresh efforts to mobilise further deposits by offering incentives, served prohibitory orders on CRB Capital Markets on April 9, 1997, restraining the company from accepting deposits and dealing with its assets.

However, Reserve Bank learnt that all the offices of the company remained closed on April 9 and its chairman Bhansali was not traceable.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.