The little known textile and real estate firm, Krishna Group, has emerged as the dark horse in the race to form joint ventures with public sector National Textile Corporation (NTC). The group’s three companies — KSL & Industries, Jay Bharat Textile & Real Estate Ltd and Eskay Knit (India) Ltd — have between them formed joint ventures with NTC for 11 mills.
The promoters of the group, however, have a history of controversies with patriarch PK Tayal at the centre of the Bank of Rajasthan scam seven years ago. Tayal was indicted by the Central Economic Intelligence Bureau for misappropriation of funds from the bank and transferring the money to various fictitious companies. When contacted, NTC CMD KR Pillai said he was aware of the group's antecedents.
The other groups that have formed JVs with NTC include Pantaloons (one mill), Alok Industries (two mills) and Bhaskar Industries (one mill).
“Formation of joint venture is a legal procedure being carried out with consultants Deloitte Touche Tomhatsu. In their business plan the Krishna Group wanted to develop these mills as garment units with investment of Rs 2-3 crore in each of these mills,” Pillai said. "There is, however, a clause wherein the JV could be annulled in case they do not deliver in five years."
Though NTC will have a majority 51 per cent stake, it will be a sleeping partner in the JV.
“Once the paperwork is over, we will firm up our plans for these mills,” said Saurabh Tayal, chairman, KSL & Industries.