NEW DELHI, April 6: Infrastructure Leasing and Financial Services Ltd (IL&FS) which bought controlling stake in Udayan Bose-controlled Credit capital Venture Fund (CVF) in July 1996 has regretted its decision to buy CVF in a written statement. In a letter sent out to shareholders, Hetal Gandhi, the new CEO of the venture fund outfit, has regretted the continuing poor performance of the company and pleaded helplessness as the financial health of the acquired company is ``severely jeopardised''.CVF, now re-christened IL&FS Venture Corporation Ltd (IVC) has sent out letters to its shareholders signed by Gandhi where he says the new management is trying to improve things notwitstanding the problems it has acquired.``We are in the process of working out a financial restructuring plan as the erosion in net worth of your company is disproportionate to the capital employed,'' he says.
IL&FS has pumped in Rs 1.12 crore into IVC, but Gandhi does not explain as to how this debt would be serviced when the losses ofthe company have only been mounting since the take-over.
Officials in the department of company affairs are surprised at this admission of regret by IL&FS. Officials ask how could IL&FS, which is controlled by the country's ``best financial engineers'', be taken in by CVF's figures and later go and express regret to shareholders for inability to improve performance. DCA officials say the expression of regret now has no meaning as there was little justification for IL&FS to pay a price of Rs 10 per share when the net asset value of CVF's share was not even Rs 4 in 1996. IL&FS paid Rs 10 per share to Bose for a 10 per cent stake in the company.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
