UGC NET COMMERCE December 2018 Q49
- Option : D
- Explanation : A number of corporate restructuring ventures were initiated by the Board of Industrial Finance and Reconstruction (BIFR). Most of these restructurings were institutionally driven and the terms and conditions were designed to suit the creditors and lending institutions. Some well-known BIFR cases during the early 1990s, in which a healthy company took over a sick company were: VAM Organic Chemical taking over Ramganga Fertilizer, Straw Products taking over Orissa Synthetic, and Voltas Ltd. taking over Miami Pharma Ltd. In all these cases, BIFR sanction helped the transferee companies enjoy the benefits of carry forward losses of the transferor companies, even though these restructurings were not reverse mergers. As at 1994, BIFR could arrange a merger of only 4.3 per cent of total cases referred to it. The list of approval of BIFR as at 1991 also included merger of two sick public sector companies viz. Bharat Refractories Ltd. and Indian Fire Bricks & Insulation Co. Ltd. The reconstruction proposals Included, among others things, writing off of about Rs.50 crore of interest.
