The West Bengal government may move court against Hindustan Motors (HM) to seek compensation of Rs 200 crore on grounds that the sale of land at the company’s Uttarpara plant was a loss to the state exchequer.
Following a state vigilance inquiry into the alleged irregularities by the C K Birla Group automobile company in selling 314 acres of excess land at the plant in Hooghly district, the state government has put its demand for Rs 200 crore in compensation from the company.
“The company understated the sale of land at its factory by Rs 200 crore. We want that to be compensated,” industry minister Partha Chatterjee said.
“The company is expected to respond in 15 days. We can take the legal route. Before that we would like to see how the company reacts to our demand,” Chatterjee said. A spokesman of the company said, “Being a law-abiding and responsible corporate, Hindustan Motors has always cooperated with the state government and relevant authorities in the matter related to sale of land at its Uttarpara plant. The company will continue to do so. However, HM is not aware of the issues.”
The transaction in question dates back to 2007. The Uttarpara plant that manufactures the Ambassador car had a total of 741 acres. Of this, the factory is built on 427 acres. The crisis-ridden company had approached the West Bengal government in 2003 to raise funds by selling the excess 314 acres of land for revival. Since the land had been vested with the government, the company needed approval for alternative usage.
In 2006, it got approval from the Left Front government to sell the land. HM had informed of a Rs 85-crore projected revenue from the sale of excess land.
However, the government claims an internal audit of the state government as well as the state vigilance inquiry has found that HM had sold the land to Bangalore-based Shriram Properties for Rs 285 crore in 2007.
The vigilance officials recently quizzed some former government officials in the land department who were at helm of affairs during the transaction.
The state also believes the money was not ploughed back to the company. However, the company had earlier denied the allegations saying the money went to ‘deficit financing’ of the Uttarpara plant.
Meanwhile, the township project in Uttarpara also has not taken off yet, as the developer has not received necessary clearances from the government for the same because of these complications.
“We have appealed to the government that we should not be penalised. Even four years after buying the land, we are unable to launch the project. We are not aware whether the state would be moving court. It is premature to comment on our stand in that case,” said Debashis Som, chief executive officer of Bengal Shriram Hi-Tech City, the special utility vehicle floated for the township project.
