First leasing gets merchant banker Ashika Capital to rectify accounts

CHENNAI: Chennai-based First Leasing Company of India, which is embroiled in an accounting scam, will seek help from merchant banker Ashika Capital for a sale or for roping in strategic partners, said chairman V Selvaraj.

However, the move will be subject to approval of the RBI and bankers. At the company’s annual general meeting, Selvaraj said that the company has been looking out for a buyer but have found the process to be difficult due to the large gap in the assets and liabilities. Mumbai-based Ashika had come forward to help rectify the accounts, he added.

The company’s 39th annual general meeting took place at The Thiruvallur Co-operative Marriage Hall, some 50 km from Chennai. Angry shareholders complained about the distance of the venue, which they said took two hours to reach as it . They were also angry over the management’s silence over queries about the future of the company.

Selvaraj told shareholders that the current AGM was held in order to appoint the auditors and not to discuss about any other operations. The company will get back to shareholders after the results of the audit, he said.

The accounting problem at First Leasing, founded by Farouk Irani in a joint venture with SPIC Group’s AC Muthiah 40 years ago, came to light last year after the Reserve Bank of India barred the firm from running any business after inspecting its books. The RBI has recently slapped a notice asking why its licence should not be cancelled. Both Irani and Muthiah have quit the firm.