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Debt Recovery Tribunal bars Varun Industries promoters from leaving India

The Debt Recovery Tribunal of Mumbai has ordered the promoters of Varun Industries to submit their passports and not leave the country without its permission.

"The counsel appearing for the applicants (consortium of banks led by Indian Bank) submitted that defendants (promoters of Varun Industries) are making attempts to leave the country to avoid arrest and legal consequences of several cases and proceedings initiated by the creditors," said the tribunal's presiding officer, HV Subba Rao, in his order.

The lenders had approached the tribunal to recover over Rs 1,900 crore in dues from the Mumbai-based steel maker. The banks had extended money to the company between 2007 and 2011 under various credit facilities, financial assistance and loans, which were payable till August 31, 2013.

In its order on Friday, the tribunal directed Varun Industries' CMD Kiran Mehta, MD Kailash Agarwal and other key people in the company to submit their passports to the registrar. It also directed them not to leave the company. Also, the company's shares have been suspended from trading for alleged violation of listing rules. The petition also names the company's other directors, Varun K Mehta, Raja Jain and Mahindra Tahilramani— as respondents.

The lenders are seeking the tribunal's intervention to restrain the company and its promoters from selling or creating any third party rights over any of the company assets that are mortgaged to the banks.

Article referred: http://articles.economictimes.indiatimes.com/2014-12-10/news/56917656_1_varun-industries-indian-bank-promoters

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