High-level panel to bail out MPSIDC | india | Hindustan Times
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High-level panel to bail out MPSIDC

india Updated: Feb 09, 2007 16:12 IST

THE STATE Government has constituted a high-power committee to negotiate a one-time settlement between MPSIDC and all its creditors. MPSIDC owes a huge amount (reportedly over Rs 300 crore) to many banks and financial institutions, including IDBI, Mumbai District Central Cooperative (MDCC) Bank, Syndicate Bank and Dena Bank.

The three-member committee comprising principal secretary (finance) Sumit Bose, principal secretary (commerce and industry) O P Rawat and MPSIDC managing director Pravin Garg will hold a series of meetings with the creditors to reach a settlement.

“The negotiation will be a long drawn out process as we will have to reach a mutually agreeable settlement,” Rawat told Hindustan Times over the phone. “Right now, budget is the first priority and the next meeting will be held after the budget,” he added.

Meanwhile, two of the companies that were granted loans as inter corporate deposit (ICD) by MPSIDC – Steel Tubes of India (STI) and holding company of Maheshwar Hydel Power Corporation – have offered a one-time settlement to MPSIDC.

Steel Tubes owes roughly Rs 52 crore against which it has offered a one-time settlement of Rs 28 crore, said an MPSIDC official requesting anonymity.

Rawat, however, said that both the companies have not contacted MPSIDC directly but sent a letter through IDBI. He refused to elaborate saying that he is yet to receive a copy of the letter.

It may be recalled that in response to a petition filed by the MPSIDC, the Indore Bench of High Court on September 27 had directed the STI to maintain status quo on its properties at Dewas and barred STI from selling off its land to NRI Swraj Paul promoted Caparo Group, which took over its Dewas unit in August 2006.

After obtaining the status quo order, the MPSIDC filed an objection before the sub-registrar, stamps and duty, at Dewas on the same day seeking prevention of transfer of the registry of STI property to any other organisation. In the objection, the MPSIDC stressed that it had attached the STI property in 2002 and therefore it could not be transferred to anyone.

MPSIDC has also disbursed large amount of money to the Induj Enertech Limited, which is the holding company of Shree Maheshwar Hydel Power Corporation, a move that had drawn criticism from the Comptroller and Auditor General (CAG) of India.