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HindustanTimes Sat,23 Aug 2014

Nashik sugar mill undervalued, sold to Bhujbal's kin

Ketaki Ghoge, Hindustan Times  Mumbai, October 23, 2013
First Published: 08:14 IST(23/10/2013) | Last Updated: 09:40 IST(23/10/2013)

Farmers and activists have raised a stink over the sale of the 292-acre Girna sugar co-operative mill to Armstrong Infrastructure Pvt Ltd, a firm owned by public works minister Chhagan Bhujbal’s family, alleging that the mill was undervalued to benefit the firm.

The mill had run up a debt of Rs. 35.49 crore, as a result of which the matter reached the Debt Recovery Tribunal (DRT).

Following valuation by government-recognised valuers in 2010, the DRT fixed the reserve price of the mill at Rs. 27 crore after which it was sold in an auction to Armstrong Infrastructure.

However, the mill was undervalued - while property prices rose between 2003 and 2010, the cost of the mill land dropped during this period.

Interestingly, after buying the mill, Armstrong Infrastructure mortgaged a portion of the land - 82 acres - and raised a loan of Rs. 30 crore from Nashik District Co-operative Bank.

“The valuation of the mill was fudged to benefit the company. Otherwise, how can a prime piece of land get undervalued from 2003,” said Uday Hirve, farmer and former member of Girna mill. He and other farmers have questioned why a similar procedure – of mortgaging land - was not adopted to pay back the dues and get the mill back on its feet.

Later, in July 2012, the bank’s report slammed the loan as irregular. The sale came at the cost of 7,300 farmers who were shareholders of the mill and the state exchequer, which handed out Rs7 crore in loans and subsidies to set up the mill. Many farmers gave up their land to set up Girna mill, while others borrowed to pay the total share capital of Rs. 2.20 crore.

Sameer Bhujbal, NCP MP, Bhujbal’s nephew and director of the company, said: “This mill was shut since 1995. We had nothing to do with the valuation. The purchase was done after DRT fixed a reserve price. We purchased it by making a formal bid.”

He said the HC has dismissed the farmers’ petition to cancel the sale. “They first begged us to buy the mill and get it running. I even paid arrears and farmers’ dues, but a section of them is playing political games to malign us,” he alleged. The farmers have filed an appeal in the apex court and the DRT.


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