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Strategies & Market Trends : India Coffee House -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (3941)	3/27/1999 11:49:00 AM
From: Mohan Marette	Respond to of 12475

RBI names DSQ Soft as defaulter George Cherian Mumbai 26 March THE much-sought-after darling of the bourses — DSQ Software — has been classified as a a “defaulter” by the Reserve Bank of India (RBI). In a circular dated January 4, 1999, the RBI's department of supervision (DoS) has advised all banks “to exercise caution” while dealing with all Dinesh Dalmia group companies, including DSQ Software, which is profitable. The other companies within the Dinesh Dalmia group include DSQ Industries, DSQ Beverages, DSQ Holdings, DSQ Textiles & Exports, DSQ Granites and DSQ Biotech. RBI has dubbed these companies “defaulters with effect from March 31, 1998”. When contacted in Chennai, DSQ Software managing director, Dinesh Dalmia admitted that the group has had difficulties in meeting repayment obligations. “These are not things that have developed in a single day's time. We are talking to banks and trying to work out a settlement,” he said. Two nationalised banks and one foreign bank also confirmed that they have “received the RBI note which clearly marks the entire group as defaulters”. Even as these group companies have defaulted in their payments, the DSQ Software scrip has been moving higher and higher on speculation of hefty profits and possible deals with AIG, Goldman Sachs and Chase Partners for large chunks of shares. The DSQ Software scrip is currently quoting at Rs 500 per share. The market has also been rife with talk that the promoters are trying to sell out their entire stake in the company at a hefty price. The Dinesh Dalmia group of companies collectively owe banks nearly Rs 32 crore for which recovery suits have been filed since early 1998. While Canara Bank has filed claims for Rs 1.03 crore from DSQ Textiles & Exports (formerly Square D Textiles & Exports), Vysya Bank has filed for recovery of Rs 3.24 crore. Indian Bank, too, has filed claims for Rs 2.03 crore from DSQ Software. The international foreign branch of Indian Bank has also reported a default on account of DSQ Biotech (formerly Square D Biotech) for Rs 5.68 crore and another for Rs 6.59 crore. Bank of India, too, has filed for recovery of Rs 12.15 crore in dues from DSQ Biotech with the debt recovery tribunal. The latest bank to move court against the DSQ group is Credit Agricole Indosuez. The French bank, through its Mumbai branch, has filed a winding-up petition against DSQ Software Ltd for non-payment of dues amounting to Rs 11.5 crore. The Chennai High Court has observed that the bank has made out a prima facie case for the winding-up of DSQ Software. The high court has adjourned the next hearing to April 24, 1999. The DSQ Software stock has been on a climb over the last few months driven by the market frenzy for software scrips. The scrip, which quoted at Rs 265 in October 1998 has gained by nearly 150 per cent in the last five months. economictimes.com