The company was, earlier this year, served a show cause notice for failing to provide the financial results. The scrip has taken a severe beating over the past several months and is currently trading around Rs 5 after touching a low of Rs 4.35 in March, 1998.

Interestingly, Prakash Industries was recently declared a sick company by the Board for Industrial and Financial Reconstruction (BIFR). While declaring the company sick, BIFR had appointed the Industrial Finance Corporation of India (IFCI) as theoperating agency in the case and asked the company to submit a fully-tied up revival scheme within six weeks.

The company had reported a staggering loss of Rs 320 crore on a turnover of Rs 759 crore for the year ended March, 1998 compared to last year's net profit of Rs 8.35 crore.

The sudden downturn in the company's financial performance had surprised many in the industry who suspected that such a reversal in fortune may have much more to it than what meets the eye specially because the company had recorded a loss of Rs 4.16 crore only on a turnover of Rs 427 crore in the first half ended September, 1997. For the same period in 1996-97, the company had a profit of Rs 42.75 crore.

The financial performance for the year fell far short of the projected net profit of Rs 263.75 crore at the time of its rights issue in 1996. The company was also, till recently, facing a multitude of legal petitions filed by several leading non-banking financial companies (NBFCs). The company is understood to have piled uphuge liabilities towards financial institutions and inter-corporate deposits, sources added.