HIRCO PLC 
By 20 February 2014
HIRCO PLC
("Hirco", the "Company")
Cancellation of admission
On 15 August 2013, Hirco requested the suspension of trading of its shares on AIM pending clarity on its financial position due to various enforcement matters relating to the Indian project companies owned by interests associated with the Hiranandani family and in which Hirco invested through participating preference shares.
As detailed below, Hirco has endeavoured over the last six months to obtain accurate information from various Hiranandani-controlled entities in India regarding the status of the Hiranandani-controlled projects and to understand why they failed to pay their debts leading to foreclosure. These efforts have been ignored and Hirco remains unable to make a full announcement of its financial position in accordance with AIM Rule 10.
Pursuant to AIM Rule 41, where a company's shares have been suspended from trading for six months the admission of these shares will be cancelled. As a consequence of the application of this rule, the last day of admission on AIM is today and the cancellation is expected to take effect on 7.00 a.m. on 21 February 2014.
Shareholders are advised that with effect from cancellation the Company's broker, N+1 Singer, has agreed to create and maintain a share trading and settlement facility for the Company. Under this facility shareholders or persons wishing to acquire shares will be able to leave an indication with N+1 Singer that they are prepared to buy or sell at an agreed price. In the event that N+1 Singer is able to match that order with an opposite sell or buy instruction, N+1 Singer will contact both parties and then effect the order.
Notwithstanding that Hirco will no longer be quoted on AIM, the Directors will continue to keep shareholders apprised of their efforts to obtain legal redress from Hirco's former Chairman, Niranjan Hiranandani, and CEO, Priya Hiranandani-Vandrevala for alleged fraud and other misconduct through notifications on the Company's website: www.hircoplc.com
These claims now seek damages of £303 million plus costs and attorneys' fees. Hirco's Board notes:
· Hirco invested over £350 million in township development projects in Panvel and Chennai, India. The Hiranandani family sponsored these projects and the bulk of the £350 million was transferred into offshore bank accounts Hiranandani family members ultimately controlled.
· Notwithstanding this £350 million investment, Hirco has been unable to obtain coherent information about the Panvel and Chennai township projects.
· Based on information the Hiranandani-controlled Indian project companies did provide to Hirco in December 2013, Hirco's accountants have calculated that cash collections for Panvel and Chennai totalled approximately £192 million up to the end of November 2013.
· According to a Cushman & Wakefield valuation the Hiranandani-controlled project companies provided to Hirco, as of late 2011 the Chennai and Panvel assets had a value of £556 million. This valuation was appreciably higher than the valuation CBRE provided to the Company's board.
· As of December 2013, the debt secured against these assets amounted to only approximately £101 million. According to a December 2013 report in the Times of India, one of the Hiranandani-controlled project companies misrepresented facts in order to obtain bank financing.
· Notwithstanding the projects' asset value and substantial cash collections, the Hiranandani-controlled entities in India defaulted on their bank obligations in 2013 and various banks have seized the Panvel and Chennai assets and put them up for sale.
· Hirco has concerns about the transparency of the sale processes and whether they will realise values for the Panvel and Chennai assets in accordance with the Cushman & Wakefield valuation noted above. Such concern is amplified as a result of comments published in the Indian press that the purchasers most likely to be interested in the assets are Hiranandani controlled entities.
· Hirco has repeatedly written to the directors of the Hiranandani-controlled Indian project companies and the last-known Chairman of the Hiranandani-controlled development company (Hirco Developments Private Limited) to ask for an explanation as to why companies with an asset value of £556 million, which had collected £192 million of cash, defaulted on loans that amounted to a small fraction of these amounts.
· In addition, Hirco asked HDPL:
(i) why the Hiranandani-controlled project companies borrowed what they did from the banks;
(ii) the plans they had made to repay those obligations;
(iii) when HDPL first realized that those plans were insufficient to repay the obligations in a timely manner;
(iv) the steps HDPL took to locate other sources of cash to repay those obligations;
(v) the steps HDPL took with those lending institutions to restructure that debt.
· Hirco has also submitted a written request to the Directors of the Hiranandani-controlled project companies and the Chairman of HDPL that a reputable international auditing firm is appointed to undertake a forensic accounting examination of their books and records in order to comprehend why the Hiranandani-controlled project companies defaulted on their obligations.
· To date, Hirco's letters have been ignored and no internationally respected auditing firm has been asked to audit the Hiranandani-controlled project companies.
Hirco will continue to pursue its legal claims for fraud and other misconduct against Niranjan Hiranandani and Priya Hiranandani-Vandrevala and expects a trial in 2015.
-ENDS -
For further information please contact:
IOMA Fund and Investment Management Limited Tel: +44 (0)1624 681250
Philip Scales
N+1 Singer Tel: +44 (0) 20 7 496 3000
James Maxwell/Nick Donovan
MHP Communications Tel: +44 (0)20 3128 8100
Andrew Leach/Tim McCall/Jade Neal
This information is provided by RNS
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