MP refuses further assistance to Shree Ltd

The fate of Ujjain-based Shree Synthetics Ltd is almost sealed after the denial of exemptions on its power dues, which, according to MP government sources, have reached Rs 64.50 crore.

The company is lying closed since January 27. The MP government has refused further assistance to the company.

The company had recently demanded exemptions of Rs 1.10 crore, which was to be paid by the company as electricity duty and cess.

The company had asked the state apex empowerment committee on investment to adjust the amount in the power bills of November 2004 and November 2005. The company had also wanted freezing the levy of electricity duty and cess in the fresh power bills.

"The finance department has not agreed to extend any support to the company," said a government source, adding "however, the departments of industry and energy have agreed to give exemptions, which the company had wanted to avoid its closure."

According to government source the company had to pay an amount of Rs 63.66 crore by June as power bill and an amount of about Rs 84.16 lakh as surcharge on the bill.

The state electricity board severed the power connection on January 21. The state labour department has filed a case against the "illegal" closure in court under the Industrial Dispute Act, 1947.

"An RC (Recovery Certificate) has been issued against the company under Section 33 C (1) of the Industrial Dispute Act 1947 for Rs 1,12,29,276 for payment of salaries and wages since the factory has closed without prior permission of the state government," Industry Minister Babulal Gaur informed the state assembly recently.

Shree Synthetics Ltd, one of the oldest nylon manufacturing companies, is facing imminent closure.

The company supported more than 2,000 families directly and indirectly and employed 1,700 people. The company has been declared sick by the Board of Industrial and Financial Reconstruction (BIFR). Company chairman Shreekant Bangur was not available for comment.