MUMBAI, July 18: Daewoo Securities, the beleagured South-Korean securities firm which has run into trouble because of its association with CRB group, is looking for a new Indian partner to continue its operations.

Daewoo Securities India operations chief CG Kim was not available for comment. However, according to informed sources the search has already begun for a new partner to replace CRB Capital Markets.

The decision on the search is expected to be taken after the outcome of the hearing of the Delhi High Court on July 21. It may mentioned that Daewoo Securities accounts and operations have been frozen after the CRB fiasco.

CRB Caps hold 24 per cent stake in the securities firm. Daewoo Securities has challenged the contention that the application money invested by CRB group be reverted to the official liquidator of CRB.

CRB Caps, the flagship company of the CRB group, has a 24 per cent stake in the Rs 16 crore equity capital of Daewoo Securities. The balance 76 per cent is held by Daewoo Securities of South Korea (50 per cent) and Daewoo Motors India Ltd (26 per cent).

Daewoo Securities had intended to increase the equity capital to around Rs 50 crore, for which it has already received the approval for investing $5 million in the company from foreign investement promotion board. Towards this new commitment, CRB group had paid around Rs 2.60 crore.

If the company intends to continue its operations in India, it needs to have a new Indian partner after the CRB episode, especially to meet the FIPB requirements of allowing to continue securities broking operations in the country.

The company, having a membership of the National Stock Exchange (both debt and equity segment), has been identified as a CRB Group company by Securities and Exchange Board of India.

Accordingly, it's NSE terminal has been switched off and is not allowed to do any securities business following its links with CRB. Till recently, the company was relatively stronger in the debt market. Now that the CRB Capital Markets and the entire CRB group has been entrusted to an official liquidator, Daewoo Securities has initiated its search for another Indian partner.

According to FIPB approval, the foreign securities firm intending to operate here has to have an Indian partner with a minimum of 25 per cent equity stake. Even as Daewoo Securities has made its decision to continue its Indian operations, it has meanwhile served termination notices to most of its Mumbai staffers. The 20-plus staff include research analysts, dealers and back office personnel.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.