The company's scheme of arrangement for issue of fully paid-up equity shares in lieu of dividend was approved by shareholders in their meeting held on October 10, 1998. Subsequently, the high court in Chennai sanctioned the scheme vide its order dated December 23, 1998.

Under the scheme, the company is allotting eight fully-paid equity shares of Rs 10 each in lieu of every Rs 520 due to shareholders as dividend for the period 1994-96. The dividend amounts due for 1994-95 and 1995-96 were Rs 4.66 crore and Rs 2.91 crore respectively.

Out of the arrear dividends, the company had already paid Rs 50.48 lakh and Rs 8.73 lakh for 1994-95 and 1995-96 respectively. According to the scheme of arrangement, the balance dividend of Rs 4.15 crore and Rs 2.82crore payable by the company for 1994-95 and 1995-96 respectively is being adjusted by issue of 10,72,832 fully paid equity shares of Rs 10 each.

This amounts to Rs 1.07 crore if one considers the Rs 10 face value of each share. The share is now quoting below par, at around Rs 3.

The company's cash flow statement for the year ended October 31, 1997, accounted for Rs 290.98 lakh as dividend paid which had also been certified by its auditors, TG Ramanathan & Co.

However, the company by its own admission had paid a little over Rs 59 lakh toward dividend for 1994-95 and 1995-96.

The fact that the company had substantial amounts unpaid as dividend beyond the statutory period was conveniently ignored in the directors' report for 1996-97 and also by the auditors of the company. Such non-compliance by the NEPC group is nothing new, say aggrieved shareholders.

The Khemkas, promoters of the NEPC group, are yet to discharge a large portion of their liability relating to the open offer to the shareholders ofDamania Airways (renamed later as Skyline NEPC).

The open offer opened on February 1, 1996, and closed on the 29th of the same month. Unable to pay the consideration to shareholders within the stipulated four weeks, the offerors returned the shares to shareholders in November 1996 stating that the amount would be paid by March 1997 against lodgment of shares.

Skyline NEPC shareholders are yet to receive their money. Its shares are today quoted at Re 1 against the offer price of Rs 35.25.

Dividend payments from NEPC group companies like NEPC India (erstwhile NEPC Micon), NEPC Agro and NEPC Textiles for 1995-96 were paid as late as March 1998. Although NEPC India claims that it paid dividends for 1995-96 in September 1996, the tax deduction certificate issued by the company shows that the TDS was deposited on March 18, 1998.