Closure of MPSIDC looms large

The closure of Madhya Pradesh State Industrial Development Corporation looms large since a number of big and medium corporate houses failed to repay the Inter Corporate Deposits (ICDs) even after the launch of the one-time settlement (OTS) scheme to resuscitate the ailing Corporation.

Ironically banks have dishonored cheques deposited by some corporate houses against ICD repayments. Few of them have reportedly demanded another settlement scheme, while others demanding zero repayment facility.

For the first time the ruling BJP-government made names of "willful defaulters of ICD loans" public in the state Assembly in a written reply.

State Industry Minister Babulal Gaur informed the State Assembly that an amount of Rs 338.93 crore is yet to be recovered from the corporate houses. Of the total sanctioned and disbursed ICD amount of Rs 663.37 crore a total of 324.44 crore has been recovered so far.

A list of the defaulters available with Business Standard says Surya Agroils Ltd, Progressive Extraction & Exports Ltd, Flour and Foods Ltd, GK Exim, Som Distilleries Pvt Ltd, Som Power Ltd, Heritage Investment Pvt Ltd, Bhanu Iron and Industries, AEC Enterprises Ltd, AEC India Ltd, Gilt Pack, Rajendra Steel, Jamna Auto, Sarita Software & Industries Ltd, Maya Spinners, BSI Ltd, STI India, Gajra Gears Ltd and few others have not repaid any amount even after the launch of one-time settlement scheme.

The minister also informed the Assembly that State Economic Offense Wing has launched a probe in the ICD loan issue. The MPSIDC is under severe financial strain since 1999 with ICD deposit outstanding of Rs 96794.71 lakh, which it has to recover from the "willful defaulters."

The Corporation sanctioned and disbursed ICDs to 56 big and small corporate houses during the year 1997 and 2000 by obtaining secured loans from some bankers.

If insiders in the MPSIDC are believed it the corporation needs a bail-out package of Rs 350 crore to repay debts (secured loans) of IDBI (Rs 135 crore), Mumbai District Central Cooperative Bank (Rs 90 crore), Bombay Mercantile Cooperative Bank (Rs 14.50 core) and Bonds (Rs 64.79 crore), In addition to this amount totaling Rs 427.99 crore, the corporation has to pay interest of Rs 291.46 crore.

The department of finance has already turned down the demand of the corporation for a bail-out package.