Pratibha-founded unit gets bank notice
The notice is served to a sugar unit, founded by the presidential candidate, for non-repayment of loan, reports S Shivadekar.india Updated: Jun 23, 2007 04:49 IST
A Mumbai bank has served Sant Muktabai Cooperative Sugar Factory, founded by Presidential candidate Pratibha Patil, a notice for not having paid back a loan of Rs 17.70 crore.
Pratibha was one of the founders and chairman of the factory, which borrowed Rs 5 crore from Mumbai Central District Cooperative Bank in the 1994-95 financial year. The factory, registered in 1980, started production in 1999. Since it defaulted on repayment for the last five years, the debt, along with interest, is now Rs 17.70 crore.
Mumbai Central District Cooperative Bank’s president Siddarth Kamble said: “We have to initiate such recovery action against defaulters irrespective of their status and image.” The bank’s managing director, VS Pitale, said: “We have initiated the process against defaulters as per banking norms. We have received instructions from National Bank for Agriculture and Rural Development, which monitors the functioning of cooperative banks, to recover our arrears. The bank’s board of directors decided to initiate recovery from defaulters.”
The bank has served notices on members of the board of directors governing the factory when they borrowed the money. The factory was in Jalgaon, 420 km north of Mumbai. It has now shut down. The money was supposed to have been paid back in seven years. The notices were sent last month, before Patil’s candidature was announced.
Pratibha’s husband Devisinh Shekhawat told HT on Thursday over the phone that he was aware of the notice, “but I don’t know if she (Pratibha) has personally received any notice because she has not been in touch with the factory for three years”.
Pratibha’s nephew Uday Patil said over the phone from Jalgaon: “She has had nothing to do with the factory for seven years.”
Pratibha’s aide de camp, when called on Thursday, gave the phone to Prithviraj Chavan, who is managing her Presidential election campaign. Chavan denied receiving any such notice. “Pratibha Patil is no longer connected with the factory, so the notice will be served to the board of directors and not to her,” he said.
When sugar factories applied for loans, their directors and founders had to supply a personal bond, which said that should the factory default, the director/founder would pay up himself/herself. Pravin Darekar, one of the directors and former chairman of the bank, said: “According to the norms of the bank, the notice is sent to both existing and former board of directors that had applied for the loan.”
There are 190 sugar factories in Maharashtra, of which 60 shut down between 2003 and 2007. They once formed the economic backbone of rural Maharashtra. In all, 25 sugar cooperatives in Maharashtra owe the bank Rs 225 crore. The industry is now in a shambles, wrecked by falling international sugar prices.
Among those who have received notices from Mumbai Central District Cooperative Bank are sugar cooperatives once headed by the Union Minister of State for Rural Development Suryakanta Patil, legislator Shalinitai Patil (both from NCP) and Congress leaders Mukul Wasnik and Rajani Patil.
Union minister Suryakanta Patil said the state’s apex cooperative bank, Maharashtra State Cooperative bank, should help defaulters pay back loans. “We haven’t taken loans for our individual benefit,” she said. “We are not deliberately delaying the payment. The sugar industry is in bad shape. The government must help us in running it and repaying the loan.”
The bank, which has 15,000 shareholders and a deposit of Rs 2,209 crore, has sent copies of the notices to district collectors where defaulting factories were located and other revenue officials.
“If the directors responsible for the default on payments do not reply within 30 days, the bank will initiate the process of attaching their properties,” a senior bank official said, requesting anonymity.