New Delhi, Oct 13: Troubled car maker Daewoo Motors India has been referred to the newly set up Serious Frauds Investigation Office (SFIO) due to financial mismanagement involving about Rs 1,000 crore. Daewoo Motors India Limited, which was being examined by the Department of Company Affairs under section 235 of the Companies Act, was referred to the SFIO last week, sources said here, adding Indian financial institutions alone have an exposure of about Rs 1,000 crore in the beleaguered car maker, which has been declared sick. After DSQ Software, Daewoo has become the second company to be referred to SFIO that has been conceived as multi-disciplinary unit for tackling white collar crimes, specially ones committed on a large scale or involving great degree of complexity. DMIL, a subsidiary of South Korean company Daewoo Corporation, eroded its entire net worth due to alleged financial mismanagement and losses suffered by the parent company. The company has been mired in litigation with creditors. Creditors include ICICI Bank with over Rs 500 crore of exposure in Daewoo India, IDBI with about Rs 200 crore and Exim Bank with Rs 100 crore stuck with the ailing company.
Sales of Daewoo cars in India dwindled after its parent company declared bankruptcy in November 2000. Thereafter, a consortium led by General Motors Corporation acquired Daewoo Korea but left out the Indian operations.
Bureau Report