YK Modi-controlled Rossell Industries had planned to shed its non-tea holdings and form a separate company for the subsidiaries. It proposed to transfer its holding in its paging outfit, Modi Korea Telecommunications Ltd, to a subsidiary.

The group had planned to concentrate only on its core business of tea, segregate the investments, loans and advances which were unrelated to the core business and transfer them to the subsidiaries.

The company had proposed to transfer its Rs 30 crore investments in non-tea assets to a subsidiary. It was proposed at the August EGM that one equity share of Rs 10 each of the subsidiaries will be issued to Rossell Industries' shareholders for every twofully paid-up equity shares of Rs 10 each of the parent held by them.

Executive vice-chairman YK Modi said that the management is in dialogue with the Industrial Investment bank of India (IIBI) top brass for seeking their approval. Though the other two FIs -- Industrial Development Bank of India and Industrial Finance Corp of India -- have already approved, Modi chose not speak on the differences between IIBI and the Rossell Industries management.

He pointed out that by selling one of its biggest tea estates, Koilamari, situated in upper Assam for Rs 20.85 crore, the company has repaid around Rs 8.2 crore dues of IIBI. Rossell Industries still owes the financial institution another Rs 74 lakh, according to Modi.

However, Modi categorically ruled out any modification or shelving of the restructuring plan.

He refused to spell out any future plans about Modi Korea Telecommunication which had ceased to be a subsidiary a couple of years ago. It is back as a RIL subsidiary in 1998.

Since subscription feesfor alphanumeric pagers are as low as Rs 250 per month and Rs 150 for numeric pagers, the company is finding it difficult to make it financially viable after making huge investments. In addition to this, the Korean partner which had invested Rs 10 crore in this project, have refused to make further investments.

At the company's 23rd annual general meeting held today, the minority shareholders were critical of the huge loans and advances by the parent to the subsidiaries.

Rossell Industries posted a sales turnover of Rs 75.07 crore to December 31, 1998, against Rs 89.16 crore (71.33 crore annualised) to the 15-month fiscal year to December 31, 1997. Though the net profit of the company declined to Rs 5.70 crore to December 31, 1998 as compared to Rs 8.24 crore (Rs 6.59 crore annualised) to December 31, 1997, Rossell Industries management recommended a 15 per cent dividend for 1998. Its annual report noted that on an annualised basis, this year's dividend is 25% higher than that of the previous year.

Onthe issue of high loans and advances, chairman PK Kaul said that certain parties are already repaying the inter-corporate deposits. He said around RS 70 lakh ICD outstanding have been repaid since January 1999.

Due to late rains, the company's tea production has been hit. Paul said that the production across the industry have been cut by half in the first four months of the current year. After late rains in April, the management feels that production might look up during the rest of the year.

While replying to queries from the shareholders on diversification into unrelated areas, Modi told them that Ogedon Energy of USA have pumped in Rs 7 crore for the new joint venture Great Eastern Energy Corp. Its previous partner, Methane India Energy Corp, in this project which is centres on exploring coal-bed methane in Ranigaung area of West Bengal had withdrawn from itself in 1998.