Lenders decline Shree Ganesh Jewellery House’s debt restructuring proposal

Shree Ganesh Jewellery House’s debt restructuring proposal was declined by lenders, reports say. Although the company has approached banks to reconsider the same, as it is optimistic about the future of its operations, reports say. The company has informed the stock exchanges of the same, as per reports.

Shree Ganesh was in December 2013 intending to restructure Rs 2,260-crore worth of bank loans, following a loss worth Rs 1,048-crore in the quarter of September 2013. Following this, the lead bank of the consortium - State Bank of India turned to Ernst & Young for a forensic audit, which indicated ‘possible fund diversion’ and lack of clarity on some transactions in 2013. Two deals proved loss making for bankers and the company – an unsuccessful bullion purchase agreement by a wholly-owned subsidiary of the company in the UAE which was cancelled in which was cancelled in October 2013 and a loss of Rs 400 crore due to lack of selling imported diamonds and hence returning them to the seller, reports say.