Hiranandani acquires Hirco’s project in Chennai
The Mumbai based Hiranandani Group has acquired Hirco Plc’s 368-acre Chennai project for Rs. 2,000 crore. Hirco Plc. is an investment firm. They raised £350 million (Rs. 3,500 crore) from global investors to fund Hiranandani Group’s Chennai and Panvel townships. The funds were used by Hiranandani Group to acquire 588 acres in Panvel and 368 acres in Chennai.
Auction Details
Sarfaesi (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest) Act, allows lenders to auction residential and commercial properties when borrowers fail to repay loans. The auction was held under this act. The property was partly developed and two previous attempts to auction the property failed to attract any interest from developers. The group, according to sources, aimed at squaring off the loan liability to retain its institutional relationships with the lender. The group’s liability to HDFC had swelled up to Rs. 590 crore with the interest component from Rs. 480- 490 crore. Punjab National Bank and Oriental Bank of Commerce have helped the group to pay HDFC as part of the default settlement.
Hirco Plc is listed on London Stock Exchange’ sub market, Alternative Investment Market, and it announced writing off of assets worth £350 million due to foreclosure of these residential projects in Chennai and Panvel.
Legal Battle
Both the parties have been embroiled in legal battle for a long time. Niranjan Hiranandani, founder of the Hiranandani Group, was chairman of Hirco Plc when the investments were made in both the residential projects. He stepped down when he was accused of breaching the Employee Provident Fund rules. The case is being investigated by CBI. In February, Hirco sued Niranjan Hiranandani and his daughter Priya Hiranandani-Vandrevala in the Isle of Man (where these investments were routed from). Hirco alleged fraud and misconduct related to company’s investment of over £350 million in these two projects.
Source: Hindu Business Line
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