Escorts Finance board recast

NEW DELHI: The Escorts group restructuring appears to be far from over. As a first step, the board of directors of group flagship Escorts Ltd was overhauled after the company defaulted on payment to creditors. Next came chairman Rajan Nanda’s decision to sell off the heart institute to Fortis. And now, it appears, he has set about to restructure another group company, Escorts Finance Ltd (EFL).

According to a notice given to the Bombay Stock Exchange (BSE), Rajan Nanda has assumed the role of managing director of EFL for the next five years. He was already holding the post of chairman in the company.

Also, the articles of association of the company have been amended so that the chairman becomes a permanent director on the board of EFL, not liable to retire by rotation. Apart from Nanda assuming greater charge at EFL, three other directors have also been appointed on the board. These include Harpreet Singh Malik, Pradeep Kumar Gupta and Munendra Kumar Singh.

The restructuring assumes significance since EFL has been facing financial troubles. The company has reported a negligible profit after tax of Rs 25.3 lakh for the quarter ended June 30, 2005, and a net loss of Rs 1.12 crore in the preceding quarter. Rajan Nanda was unavailable for comments despite several attempts.