Search the Internet            Tips

ANZ to deposit Rs 15.22 billion with SC in NHB case

Foreign bank major ANZ Grindlays said on Thursday that it will deposit Rs 15.22 billion complying with the Supreme Court order in the ongoing dispute with India's National Housing Bank arising out of the 1992 securities scam.

ANZ chief financial officer Peter Marriott said from Melbourne "the decision by the Supreme Court is an important step in putting the matter behind us as it halts further accumulation of interest on the disputed amount and caps ANZ's contingent liability in this dispute."

As part of the protracted court battle over refund of deposits made by NHB for purchase in securities, ANZ Grindlays had appealed to the Supreme Court in December 1999 that it be allowed to deposit the principal and interest to the court receiver so that its liabilities were frozen.

ANZ sources said from Bombay that the bank would deposit the amount in State Bank of India 'very soon' in accordance with the court's decision.

NHB chairman P P Vora, however, told reporters that the amount would continue to draw interest at the rate of 18 per cent till the case was disposed of.

The Apex Court will hear the case again in April, Vohra said, adding that hearing was now in final stages.

The figure of Rs 15.22 billion comprises Rs 9.12 billion being the principal as settled by the arbitrators and Rs 6.10 billion being the interest.

Although ANZ sold its Indian operations to Standard Chartered Bank in April, the former bank has provided the latter with "indemnities" on credit and litigation matters, including the NHB matter, the ANZ statement said.

The dispute started in 1992 when NHB deposited Rs 5.06 billion with ANZ Grindlays for the purchase of securities, but was unable to realise the fund or securities after the scam involving Harshad Mehta, Vora said.

Although the Reserve Bank of India had asked the foreign bank to return the money to NHB, the two parties went for arbitration. NHB lost the arbitration case in 1997 and submitted Rs 9.12 billion that included interest in favour of ANZ but filed a suit with the special court in Bombay.

Tell us what you think of this report