HRCO Hirco

TIDMHRCO

RNS Number : 9625V

Hirco plc

19 December 2013

19 December 2013

HIRCO PLC

(the "Company")

Business Update

The Board of Directors of Hirco Plc wishes to respond to recent public statements by a spokesman for Niranjan Hiranandani regarding Mr. Hiranandani's responsibility for the insolvency of township projects in Panvel and Chennai and ongoing suggestions that Hirco Plc in some way bears responsibility for the defaulted bank loans.

Hirco Plc has no physical presence in India. Hirco Plc was created in 2006 to invest in FDI compliant Indian real estate development projects to be sourced by Niranjan Hiranandani, his wife Kamal Hiranandani and entities controlled by them. At the outset Mr. Hiranandani and his daughter Priya Hiranandani-Vandrevala were Hirco Plc's Chairman and CEO, respectively.

In 2007, Hirco Plc paid approximately GBP350 million into accounts controlled by Mauritius legal entities that in turn were controlled by Hiranandani family interests. That money was largely used to purchase 588 acres of land in Panvel and 368 acres of land in Chennai from Hiranandani-controlled entities. The acquired land was held by several Indian companies including Hiranandani Palace Gardens and Sunny Vista Realtors. Hiranandani Palace Gardens and Sunny Vista Realtors were controlled by Hiranandani family interests and included among their directors at various times Niranjan Hiranandani, Darshan Hiranandani, Kamal Hiranandani, Cyrus Vandrevala, Jerxis Vandrevala, and various people appointed by the Hiranandani and Vandrevala families.

It was these legal entities - Hiranandani Palace Gardens and Sunny Vista Realtors - controlled by these individuals at various times that obtained lines of credit totaling Rs. 1,490 Crores and borrowed money totalling approximately Rs. 1,384 Crores from various Indian lenders including HDFC, Yes Bank, Tata Capital, Punjab National Bank, Andhra Bank, UCO Bank, and LIC Housing Finance. Hirco Plc has been informed that Hiranandani Palace Gardens and Sunny Vista Realtors defaulted on their obligations and currently owe these lending institutions approximately $160 million (approximately Rs. 991 Crores). On 16 December 2013 Punjab National Bank placed a notice in the Hindustan Times that Sunny Vista Realtors would be sold at auction on 22 January 2014 to satisfy unpaid obligations to various lenders.

Hirco Plc had no involvement whatsoever in borrowing this money and had no control or involvement in any of the affairs of Hiranandani Palace Gardens or Sunny Vista Realtors. Hirco Plc had no involvement in the development of the Panvel and Chennai projects or the sale or collection of money from people who purchased units in these developments. These activities were carried out by another Hiranandani/Vandrevala controlled entity, Hiranandani Developments Private Limited. Although Mr. Hiranandani resigned as Chairman of Hirco Plc in late 2010 following allegations of misconduct in India and his daughter resigned soon thereafter, both were directors at various times of Hiranandani Palace Gardens, Sunny Vista Realtors, or Hiranandani Developments when many of the defaulted loans were made and continued to serve as directors of various of these companies for some time (and in Mr Hiranandani's case until August 2012), when they resigned for unexplained reasons and were replaced by other persons appointed by the Hiranandani and Vandrevala families.

Hirco Plc will continue to pursue redress against Niranjan Hiranandani and Priya Hiranandani, for fraud and other wrongdoing through the ongoing litigation and arbitration proceedings.

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

This information is provided by RNS

The company news service from the London Stock Exchange

END

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