Hirco plc Business Update (5995X)

TIDMHRCO

RNS Number : 5995X

Hirco plc

14 January 2014

14 January 2014

Receiver Appointed for Chennai Assets

On 24 December 2013, the Bombay High Court appointed a court receiver to manage the property of Hiranandani Palace Gardens, the owner of the Chennai residential assets. The court issued the order appointing the receiver on the application of Tata Capital Financial Services after Hiranandani Palace Gardens defaulted on a loan of R76 Crore - approximately GBP7.5 million. The court also directed Hiranandani Palace Gardens to file an affidavit of disclosure detailing all of that company's unencumbered assets.

Tata Capital alleged in support of its winding up petition that Hiranandani Palace Gardens had misrepresented facts to obtain the loan.

Based on information provided to Hirco Plc by the Indian project companies, Hirco Plc has calculated that cash collections for Panvel and Chennai totalled approximately GBP192 million up through the end of November 2013, that according to a Cushman and Wakefield valuation the project companies provided to Hirco Plc as of late 2011, the Chennai and Panvel assets had a value of GBP556 million, that some or all of these assets secured debt amounting to GBP101 million, and that the Tata enforcement action is for approximately GBP7.5 million plus interest and costs. Hirco Plc has therefore written to the directors of the Indian project companies demanding an explanation as to how and to whom the cash collections were disbursed and why the companies were unable to repay their debts. The Company has also asked for a forensic accounting examination of the books and records of the Indian project companies. Finally, Hirco Plc has notified the directors of the Indian project companies that if adequate explanations are not forthcoming, it will notify law enforcement authorities. A copy of this letter has been posted to Hirco Plc's website.

Hirco Plc will also continue to pursue redress against Niranjan Hiranandani and Priya Hiranandani, for fraud and other wrongdoing through the ongoing litigation and arbitration proceedings.

For further information please contact:

   IOMA Fund and Investment Management Limited                      Tel: [phone] 

Philip Scales

N+1 Singer Tel: [phone]

James Maxwell/Nick Donovan

This information is provided by RNS

The company news service from the London Stock Exchange

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