Rajshree Sugars takes Axis to Court

Chennai : The markets were rattled when Hexaware announced
late last year that it has provisioned for $ 20 to $ 25 million to cover its
forex losses. Even as the company was trying to deal with the issue, there were
murmurs that Hexaware was only the tip of the iceberg and that corporate India
is sitting on a time bomb. More credibility has just been added to the fears.

The latest to join is Coimbatore-based Rajshree Sugars and
Chemicals when it filed a case against Axis Bank in Madras High Court alleging
that the forex derivative product sold to them by the bank did not take care of
their needs. The currency involved and the quantum of losses is not known yet.
R. Varadarajan, chief operating officer of Rajshree told TOI that his company
has indeed filed a case around a forex derivative sold to it by Axis.

Even a conservatively-run Sundaram Brake Linings, part of the
TVS group, has pulled up its bankers and dragged them to the Courts, alleging
that their bankers have mis-sold derivative products. The monies involved here
is not much though. Sundaram Brake said that it has rejected a demand of Rs.1.76
crore from one of the banks saying that the contract was void. Small and
medium-sized companies are up in arms against their bankers. Many of these
companies have been caught on the wrong foot due to the weakening of US dollar
against several currencies, including the euro, Swiss franc and Japanese yen in
the current fiscal.