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Maruti fails to recover dues from PSUs, freezes lending

Having failed to recover over Rs 220 million from two ailing public sector undertakings, Maruti Udyog Limited froze further lending to PSUs.

With both the Kota-based Instrumentation Limited and Hindustan Photo Films -- slipping into the red, the chances of Maruti recovering the dues seems bleak, company sources said.

The PSUs were given the amount as inter-corporate deposits in 1989. Maruti has been trying to get back the money since 1993, even taking the matter to court, filing an application that the companies be wound up to recover the money. It was relying on a provision that if the company could not pay in time then the creditor could seek that it be wound up.

MUL Director, Finance, A R Halasyam, when contacted, admitted the outstanding amount, saying that a joint package is now being worked out and that the company is likely to get back at least the principal amount.

Meanwhile, sources said that since both companies are currently under the purview of the Board for Industrial and Financial Reconstruction, MUL is now waiting for the revival package to be formulated before recovering its dues. mul has already agreed to forgo the interest on its lending to IL. "We expect to get back at least the Rs 170 million that IL owes us over the next two years," one of them said.

However, there are no signs of recovery of the Rs 50 million lent to HPF. Though that company too is under the purview of the BIFR, there has been no indication that it was willing to repay the loan.

"We have some hope left, keeping in mind that these companies do have some assets like land, buildings etc. If nothing else, we can benefit from the sale proceeds of these," the source said.

Another PSU -- Hindustan Insecticides Limited -- had borrowed close to Rs 20 million from MUL. That was recently returned, with interest.

Having faced such trouble in recovering its dues, the company has now decided to discontinue lending to PSUs.

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