Hirco plc Cancellation of Admission (5637A)
21 February 2014 - 1:00AM
UK Regulatory
TIDMHRCO
RNS Number : 5637A
Hirco plc
20 February 2014
20 February 2014
HIRCO PLC
("Hirco", the "Company")
Cancellation of admission
On 15 August 2013, Hirco requested the suspension of trading of
its shares on AIM pending clarity on its financial position due to
various enforcement matters relating to the Indian project
companies owned by interests associated with the Hiranandani family
and in which Hirco invested through participating preference
shares.
As detailed below, Hirco has endeavoured over the last six
months to obtain accurate information from various
Hiranandani-controlled entities in India regarding the status of
the Hiranandani-controlled projects and to understand why they
failed to pay their debts leading to foreclosure. These efforts
have been ignored and Hirco remains unable to make a full
announcement of its financial position in accordance with AIM Rule
10.
Pursuant to AIM Rule 41, where a company's shares have been
suspended from trading for six months the admission of these shares
will be cancelled. As a consequence of the application of this
rule, the last day of admission on AIM is today and the
cancellation is expected to take effect on 7.00 a.m. on 21 February
2014.
Shareholders are advised that with effect from cancellation the
Company's broker, N+1 Singer, has agreed to create and maintain a
share trading and settlement facility for the Company. Under this
facility shareholders or persons wishing to acquire shares will be
able to leave an indication with N+1 Singer that they are prepared
to buy or sell at an agreed price. In the event that N+1 Singer is
able to match that order with an opposite sell or buy instruction,
N+1 Singer will contact both parties and then effect the order.
Notwithstanding that Hirco will no longer be quoted on AIM, the
Directors will continue to keep shareholders apprised of their
efforts to obtain legal redress from Hirco's former Chairman,
Niranjan Hiranandani, and CEO, Priya Hiranandani-Vandrevala for
alleged fraud and other misconduct through notifications on the
Company's website: www.hircoplc.com
These claims now seek damages of GBP303 million plus costs and
attorneys' fees. Hirco's Board notes:
-- Hirco invested over GBP350 million in township development
projects in Panvel and Chennai, India. The Hiranandani family
sponsored these projects and the bulk of the GBP350 million was
transferred into offshore bank accounts Hiranandani family members
ultimately controlled.
-- Notwithstanding this GBP350 million investment, Hirco has
been unable to obtain coherent information about the Panvel and
Chennai township projects.
-- Based on information the Hiranandani-controlled Indian
project companies did provide to Hirco in December 2013, Hirco's
accountants have calculated that cash collections for Panvel and
Chennai totalled approximately GBP192 million up to the end of
November 2013.
-- According to a Cushman & Wakefield valuation the
Hiranandani-controlled project companies provided to Hirco, as of
late 2011 the Chennai and Panvel assets had a value of GBP556
million. This valuation was appreciably higher than the valuation
CBRE provided to the Company's board.
-- As of December 2013, the debt secured against these assets
amounted to only approximately GBP101 million. According to a
December 2013 report in the Times of India, one of the
Hiranandani-controlled project companies misrepresented facts in
order to obtain bank financing.
-- Notwithstanding the projects' asset value and substantial
cash collections, the Hiranandani-controlled entities in India
defaulted on their bank obligations in 2013 and various banks have
seized the Panvel and Chennai assets and put them up for sale.
-- Hirco has concerns about the transparency of the sale
processes and whether they will realise values for the Panvel and
Chennai assets in accordance with the Cushman & Wakefield
valuation noted above. Such concern is amplified as a result of
comments published in the Indian press that the purchasers most
likely to be interested in the assets are Hiranandani controlled
entities.
-- Hirco has repeatedly written to the directors of the
Hiranandani-controlled Indian project companies and the last-known
Chairman of the Hiranandani-controlled development company (Hirco
Developments Private Limited) to ask for an explanation as to why
companies with an asset value of GBP556 million, which had
collected GBP192 million of cash, defaulted on loans that amounted
to a small fraction of these amounts.
-- In addition, Hirco asked HDPL:
(i) why the Hiranandani-controlled project companies borrowed what they did from the banks;
(ii) the plans they had made to repay those obligations;
(iii) when HDPL first realized that those plans were
insufficient to repay the obligations in a timely manner;
(iv) the steps HDPL took to locate other sources of cash to
repay those obligations;
(v) the steps HDPL took with those lending institutions to
restructure that debt.
-- Hirco has also submitted a written request to the Directors
of the Hiranandani-controlled project companies and the Chairman of
HDPL that a reputable international auditing firm is appointed to
undertake a forensic accounting examination of their books and
records in order to comprehend why the Hiranandani-controlled
project companies defaulted on their obligations.
-- To date, Hirco's letters have been ignored and no
internationally respected auditing firm has been asked to audit the
Hiranandani-controlled project companies.
Hirco will continue to pursue its legal claims for fraud and
other misconduct against Niranjan Hiranandani and Priya
Hiranandani-Vandrevala and expects a trial in 2015.
-ENDS-
For further information please contact:
IOMA Fund and Investment Management Limited Tel: +44 (0)1624 681250
Philip Scales
N+1 Singer Tel: +44 (0) 20 7 496 3000
James Maxwell/Nick Donovan
MHP Communications Tel: +44 (0)20 3128 8100
Andrew Leach/Tim McCall/Jade Neal
This information is provided by RNS
The company news service from the London Stock Exchange
END
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