Textile traders seek action against 'vanishing firms'

The Federation Of Surat Textile Traders' Association has written to the chief minister Narendra Modi demanding that steps be taken at the earliest to check instances of textile units going defunct, pushing Surat's textile industry into crisis.

Surat is one of the largest textile industry centres in the country.

The local industry is, however, plagued by various problems for a few months.

One major problem is recession, while another factor that is hurting the industry is the trend of firms going defunct and defaulting on payments.

The association vice president and media convenor Devkishan Manghani, said, "Over 40 textile firms, including small and big units, have gone defunct since Diwali. Traders, weavers and processors have lost about Rs 100 crore because of this."

"The problem of parties going defunct and defaulting on payments was always there. But this has assumed dangerous proportions of late. Many people open shops in the textile market area, build a good reputation in the initial months and then leave overnight with crores of rupees, leaving traders in the lurch. This has created an atmosphere of mistrust in the industry," Manghani said.

What is compounding the woes of the textile industry is the fact that the police is not taking the matter seriously.

"Whenever we approach police, we are told that it is a civil matter. They ask us to go to court, but it is not a practical option as court procedures could take several years before any result is achieved," Manghani said.

The association vice president said, "Police have registered cases against some defunct firms, but it was of no use. There is no fear of law, which has in a way encouraged more and more firms to go defunct. If strict action is taken against a few guilty units, we are sure the number of such instances will reduce considerably."

Manghani said, "We have demanded setting up of a separate economic offences wing for the textile industry. This wing will deal only in economic offences, which will lead to speedy investigations and hopefully help curb such instances."

The association represents around 40,000 textile traders.

The association representatives have also approached The Southern Gujarat Chamber of Commerce and Industry and sought their help in raising the issue at higher levels.