A two-member bench of BIFR comprising chairman PP Chauhan and member G Narayanan said that the company has become sick in terms of the Sick Industrial Companies Act 1985 due to complete erosion of its net worth of Rs 95.40 crore by accumulated losses of Rs 175.32 crore. Stating that the company could not revive on its own, the bench said it was necessary in public interest to take measures for its revival and appointed State Bank to study the sick company's viability and prepare a rehabilitation scheme, if found viable.

The board directed State Bank, the operating agency, to get the assets of Pyrites Posphastes and Chemical Ltd valued by a reputed firm of chartered accountants and conduct a detailed techno-economic viability study of the company, if required. Bench also directed the promoters not to dispose of any fixed or current assets of the company without Board's prior permission.

Pyrites Phosphates and Chemicals was incorporated in 1960 and commenced commercial production in 1988. The company suffered losses on account of withdrawal of import substitution incentives for sulphur. BIFR bench directed Pyrites Phosphates and Chemicals to allow State Bank access to all information regarding the company as well as inspection of the plant. The board also asked State Bank to pay special attention to the managerial competence of promoters and executive level while conducting the study.

State Bank will also suggest cost reduction measures for the rehabilitation of the sick company and work out reliefs and concessions within the RBI guidelines.