The corporation, which is facing imminent closure after a multi-crore scam, will hold a meeting with its bond-holders under chairmanship of a retired judge of the Jabalpur High Court, appointed by the Union Ministry of Company Affairs, to settle dues of bonds it had mopped up in 1999.
Several charitable organisations, firms, public sector undertakings and co-operative banks will be urged to settle dues at much lower rates they had been offered in 1999.
Two former senior executives of the corporation had allegedly disbursed inter-corporate deposits (ICDs) which they borrowed from various banks as secured loans and disbursed it among 22 influential industrialists without going through prescribed procedures and norms.
The industrialists have refused to repay even principal of the ICDs. In a few cases the borrowers were allowed to negotiate twice under the "one time settlement scheme" and offered repayment at a much lower interest rate of 1% against the applicable 18% rate.
"The MPSIDC had mopped up Rs. 82 crore in 1999 by way of bond deposits at 14.4 per cent interest and had admitted that its re-investment plan has collapsed, thereby pushing PF funds of its 174 bond depositors in logjam," a government source said adding, "After the meeting the chief justice will submit its report to the government of India.
Later the GoI will advise the government accordingly and state cabinet will discuss whether to accept the GoI advise."
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However insiders told BS privately "it is most unlikely that bond-holders will agree on accepting lower returns. Since an amount of Rs 210 crore has been allocated for all settlements of MPDIC dues which have touched as high as Rs 900 crore."
As a result it is the most likely option that the government will close down the corporation.
The state government had ordered an inquiry into this collapse of the MPSIDC's re-investment plan. The case is being handled by the Economic Offences Wing without any outcome even after four years. Insiders have also told BS, "The probe is going at snail pace and at will of few sitting politicians."
RBI had also reportedly directed commercial banks to compensate relief and savings bondholders for the loss they incur if the interests warrant or maturity value of their investment is credited late.
The MPSIDC, according to senior officials owes Rs 135 crore to IDBI, Rs 90 crore to Mumbai District Central Cooperative Bank, Rs 14.50 crore to Bombay Mercantile Cooperative Bank and Rs 64.79 crore as Bonds and other amount totaling Rs 427.99 crore. The corporation has also to repay interest of Rs 291.46 crore.
Thus the corporation needs a total of Rs 715.45 crore as a fresh lease of life. IDBI and Mumbai District Central Cooperative Bank have obtained orders of attachment of properties of the Corporation.
Last year the MPSIDC had demanded of bailout package of Rs 350 crore to the finance department repay debts (secured loans) of Rs 427 crore, which it owes to IDBI Mumbai District Central Cooperative Bank, Bombay Mercantile Cooperative Bank. Against which the state government had offered a bailout package of Rs 210 crore.