Daunted by allegations of serious financial irregularities that has put it in deep crisis, agri cooperative Nafed would consider tomorrow giving the majority stake in it to the government for an estimated Rs 2,000 crore bail-out package.
"Tomorrow, the government has called a meeting of Nafed Board to discuss about rehabilitation package," Newly-elected Nafed Managing Director Sanjeev Chopra told PTI.
Incidentally, the Central Registrar of Co-operative Societies has issued show cause notices to as many as 29 top officials, including current Chairman Bijender Singh, based on an enquiry report that alleged financial irregularities involving about Rs 4,000 crore.
While the cooperative has recovered about Rs 2,800 crore from those involved in alleged wrongdoings, Nafed still has bad debts of about Rs 1,600 crore (including interest) forcing it to seek government help.
The government, while agreeing to consider a bail-out has sought 51 per cent stake in Nafed, which would loose its character of farmers' cooperative if the proposal goes through, a top ministry official said.
Chopra, who himself is a nominee of the Agriculture Ministry, said the government offered a conditional bail-out for which Nafed would have to agree to give 51 per cent equity to the Centre. Upon the transaction, it would be for the government to nominate the Managing Director and Director Finance.
"The bail-out package would be given only at government's terms and conditions. If Nafed Board does not want to accept, it is up to them", he said.
Nafed had been seeking financial assistance of Rs 2,000 crore since early 2,009 to overcome the precarious condition caused by Rs 3,900 crore unsecured loan to 62 companies and default 29 firms entailing an amount of Rs 1,600 crore.
An enquiry committee was appointed by Central Registrar of Co-operative Societies to enquire into the conduct of board of directors of Nafed and its officers. A joint secretary in the Agriculture Ministry is Central Registrar.
The Central Registrar has asked these 29 officials to appear before it on September 16, an Agriculture Ministry official said.
