At the bottom of Escorts Heart

If you thought the sibling joust between Rajan and Anil Nanda was over, think again.

If you thought the sibling joust between Rajan and Anil Nanda was over, think again. In a fresh twist to the battle over Escorts Heart, the government has asked Escorts Heart Institute and Research Centre (EHIRC) to furnish details of all transactions and agreements made on behalf of the society (EHIRC) since March 2000. The regulator has threatened to initiate legal action under Companies Act in case the company fails to respond within specified time.

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This comes against the backdrop of Fortis’ Shivinder Singh buying Escorts for Rs 650 crore and the matter being sub judice since, pending in Delhi High Court. The Registrar of Companies has asked it to furnish details of all court cases filed against it involving the conversion of society into a company.

In a letter dated April 28, 2006,  Manmohan Juneja, Registrar of Companies, has sent it 33 queries. It has asked whether the society (EHIRC), converted into a company, had received any donations. “If so,  please furnish a list thereof indicating names of the donors and the donations received from each of such donors,” said the Registrar. At the time of incorporation, balance sheet of the society, as on March 31, 2000, revealed a paid-up capital  of Rs 20.6 lakh and current liabilities of Rs 1.5 lakh.  In the first balance sheet of the company after conversion, reserve and surplus were Rs 128.26 crore, share capital was Rs 2 crore while it disclosed a net profit of Rs 17.41 crore, between the period from May 30, 2000 to March 31, 2001. 

“It is not understood as to how the reserves and surplus swelled to Rs 128.26 crore. Please clarify with documentary support for the difference between the two accounting periods and sources of such amount under each head of the balance sheet.”

It has asked the company to furnish details of advances given to the holding company (balance Rs 28.15 crore as on March 31, 2001) and loan to subsidiary companies for each accounting year since incorporation.

On land dispute with DDA, the Registrar says, “Please explain why leasehold land has not been amortised over the period of the lease as per the accounting standard. It is also noted that the company is in litigation with regard to the land from DDA. Please specify the nature of the such dispute and the present status thereof.” It also wants to know how the shareholding pattern of the company altered at the time of the conversion from society to company.