CM orders probe into Surat vanishing firms

The alarming increase in the number of vanishing firms in the textile market of Surat, once the hub for textile industry in India has forced the state government into action.

On Wednesday, chief minister Narendra Modi ordered a probe by the state home department. The Surat city police also have been intimated by the home department and have been asked to act strict with the law breakers.

Surat's textile industry is being plagued by various problems such as recession and overproduction for last one year.

To add to their worry, the flurry of vanishing textile firms have brought a permanent bad name to the entire industry. In last six months alone at-least 40 to 50 textile firms have vanished, duping local traders and weavers to the tune of around Rs 100 crore.

The Federation of Surat Textile Traders Associations (FOSTTA) made representations at various levels seeking action against vanishing firms.

FOSTTA had written a letter to chief minister Narendra Modi demanding action against the cheats in interest of textile industry. The federation representatives had also met Modi during his recent visit to the city.

The chief minister is learnt to have assured traders that necessary action would be taken against the dubious traders. A letter to this effect was sent to FOSTTA by the chief minister's office, in which Modi has assured that he would direct the state home ministry to take appropriate action.

FOSTTA vice president, Devkishan Manghani, said, "Yes, we have received such a letter and we are happy that our voice has finally been heard. We will, however, be pleased, only when some serious steps to protect the textile industry are initiated."

"As I have mentioned several times earlier, inaction of police department against the cheats has also played a major role behind this sudden jump in the number of vanishing firms in the recent months. We have demanded setting up of a separate Economic Offence Wing, which would deal only in such cases. We are hopeful that the CM would look into our demand and give it a considerate thought," said Manghani.

On June 11, weavers of Surat observed a symbolic strike and organised a vehicle rally here on Friday, protesting the inaction of police department against vanishing firms.

The weavers also went to the district collectorate and made representation to district collector Pankaj Joshi, urging him to take steps to curb the instances of vanishing textile firms.

Weavers stated that these instances were leading to loss of crores of rupees to weavers and inflicting killer blows on the powerloom industry. Of late, Surat's textile industry has been plagued by various problems.

There have been numerous strikes over one or the other issue.

The industry is facing a major slump or recession since some months. The biggest problem facing textile industry though, is the increasing number of vanishing firms. Two to three textile firms are vanishing from Surat almost every week, duping traders and weavers to the tune of lakhs crores of rupees and inflicting big blows on the textile industry.

"This trend has become stronger in the last few months as close to 50 firms have vanished in the post-Diwali period, defrauding local traders and weavers to the tune of a whopping Rs 100 crore.

There are many factors, such as recession, overproduction, police inaction, etc. which are responsible for increasing number of vanishing firms, but the biggest reason is the emergence or involvement of cheats of frauds in the industry," said an industry expert.