Margadarsi can at best pay 49 ps to a rupee – Rangachary Committee

By Vijay Kumar

Here is a company in which the owner has no equity or capital investment. The company has an impeccable record of paying back debtors. How did they do it? Simple! borrow more to pay the debtors. Of course the bubble had to burst some day.

The Rangachary Committee appointed to inquire into the affairs of Margadarsi Financiers is understood to have submitted its report with a copy to media baron and Margadarsi chief Ramoji Rao. The Committee’s findings:-

++ deposits raised by Margadarsi were used to make investments in group concerns and to finance the periodical losses.

++ a major part of deposits raised every year was going towards meeting the current losses and investments, thus reducing its ability to repay the deposits.

++ fresh borrowings were made to meet current losses.

++ Margadarsi survived because of the cycle of borrowings.

++ Balance sheets did not show any own equity or capital of its own invested in the business.

++ the only route to meet capital requirements was to raise public deposits.

++ Margadarsi invested in dormant companies.

++ Assets shown by the company is Rs. 1300 Crores while debts were to the tune of Rs. 2700 Crores.

Meanwhile support is pouring in for Ramoji Rao from all sides ranging from the CPM to the BJP.

And RamojiRao’s petition is to come up before the Chief Justice of the Supreme Court today. Ramoji’s petition before the Apex Court says that the State Government action was to financially destabilise the media enterprise from running the daily Eenadu and 12 television channels. It also submits that in the guise of executing the warrant, the police let loose terror and various unrelated and unconnected documents were seized in an attempt to create panic among the depositors. "The freedom of the press and the right to free speech enshrined in the Constitution are in grave danger and the impugned GOs are part of the attempts of the State government to silence Eenadu.", the affidavit added.

Interestingly, N. Ram, Editor-in-Chief of The Hinduhas filed an application to impleadhimself in the SLP.

The Cause List for the Chief Justice’s Court for today shows