Ashapura Minechem Limited has informed the Exchange about Pendency of Litigation(s)/dispute(s) or the outcome impacting the Company
ASHAPURMIN · price
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Ashapura Minechem has informed exchanges that Bank of India (BOI) has demanded Rs. 65.91 crores (including interest) by invoking a 'Right of Recompense' clause from a 2013 Compromise Deed, under which the company had already fully repaid Rs. 125 crores plus interest by September 2015. The original clause capped any recompense at an interest-free Rs. 25 crores, contingent on meeting financial covenants — BOI's current demand significantly exceeds this cap. The Board has approved filing a Writ Petition before the Bombay High Court challenging the validity of the clause and the recall notice, citing violations of applicable laws, RBI guidelines and constitutional provisions. The company is also seeking relief against BOI's continued classification of the company as an NPA despite full repayment, and BOI's refusal to release securities and fixed deposits. The company states there is no immediate material financial impact on operations.
This is a material contingent liability for shareholders — a Rs. 65.91 crore demand (~2x the originally capped Rs. 25 crores) plus an ongoing NPA classification could affect the company's banking relationships, credit access, and finances if the court rules against it. However, the company is proactively contesting the demand, and no immediate operational impact has been disclosed. Investors should monitor court proceedings closely.