Supreme Court stays Debt Recovery Appellate Tribunal's order

13-Feb-09

The Supreme Court has stayed the Debt Recovery Appellate Tribunal's order, asking banks to release on a monthly basis, Rs. 13 crore to Southern Petrochemicals Industries Corporation (SPIC) to restart and operate the plant. The outstanding debts to date, according to the lender banks - Indian Bank, Dena Bank, State Bank of Patiala and Bank of Rajasthan, are over Rs. 2,800 crore, while the valuation of the assets of the ailing company, as done by Ernst and Young, was only Rs. 1,553 crore. The tribunal's interim order against the lender banks has been upheld. The tribunal on March 5, 2008, had asked the banks to release Rs 8 crore and Rs 5 crore a month to SPIC for operational expenses and restarting the plant, respectively. Opposing the release of further funds, the banks in their appeal said that they had an exposure of over Rs. 300 crore to the company, hoping that they would be able to recover their dues after SPIC turns around.