New Delhi: IFCI has taken Emaar MGF to court, alleging non-refund of Rs 50 crore invested by the financial institution in a pre-IPO placement transaction with the real estate company.
In February this year, Emaar MGF had approached the capital markets with an Initial Public Offer (IPO) of about Rs 6,500 crore, but subsequently withdrew the public issue citing adverse market conditions.
Sources in IFCI claimed that it had taken recourse to legal action as Emaar MGF was not willing to refund the money, but instead had offered shares at a price much lower than the price band. This was not acceptable to IFCI, which sought refund of the entire money with interest.
Emaar MGF, however, is learnt to have offered to repurchase the shares but was not acceding to the interest demands of IFCI saying that interest on subscription money was not legally and contractually “permissible”. The company had made payment of about Rs 17 crore to IFCI, as part repayment.
Turns into NPA
IFCI officials contend that shares were not allotted to them in demat form and therefore the question of “purchase” did not arise. Some shares were allotted in physical form which was not accepted by IFCI.
“IFCI had initiated efforts to recover the entire money back. We are also asking for interest (18.5 per cent per annum) as the money was locked in for more than 90 days,” IFCI sources said, adding that this transaction had become an NPA.
Sources close to the development said that IFCI has filed a winding-up petition in Delhi High Court against Emaar MGF on the issue, and claimed that the court has admitted the petition. The case is expected to come up for hearing in October.
Emaar MGF stand
When contacted, an Emaar MGF spokesperson said the company was unaware of any such case being filed against it. “There is a minor issue with IFCI pertaining to the interest amount which is contractually and legally not permissible. We are committed to resolve this issue of interest amounting to a meagre sum of Rs 1.5 crore (approximately), and are in discussions with IFCI,” the spokesperson said.
