The dispute between Jessop & Co and the West Bengal government over disinvestment has been resolved with the state government reconsidering its demand for the central counter-guarantee for the Rs 38 crore loan to Jessop.
The state government has agreed to Bharat Bhari Udyog Nigam being a witness to the signing of the guarantee paper with Jessop. Bharat Bhari Udyog Nigam is the holding company for Jessop.
The issue was resolved at a meeting held before the Board for Industrial and Financial Reconstruction (BIFR) today.
Though the BIFR is yet to clear the disinvestment proposal, it has asked Ruia Cotex, new promoter, to respond to some employee-related issues in the next 48 hours. The Board has also asked Punjab National Bank, one of the company's creditors, to decide about a concession to the company within 15 days.
Jessop's disinvestment process ran into trouble, with the West Bengal government demanding that Ruia Cotex give a bank guarantee of Rs 38 crore against a loan of the same amount the company owed the state government.
The issue had come up at a BIFR hearing on Jessop's disinvestment on July 18. The board had given the state government 10 days to reconsider its demand.
The government had identified Ruia Cotex as a prospective buyer.
