Textile industry to tighten fight against fraudsters

The textile industry of Surat, which is grappling with increasing instances of vanishing firms, has constituted an action committee.

A meeting of representatives of the weavers association, processors association, traders association, and commission agents association, was held on Tuesday evening, to discuss measures to curb the instances of vanishing firms.

"The first decision taken during the meeting was to deal only with old and trusted brokers. No trader or weaver would indulge in dealings through new or unknown brokers. The traders and weavers were also suggested to encourage direct dealings, as this would give them a chance to know one another better, and thus reduce the risk factor considerably," an industry source said.

"At present, the payment system in the industry is very liberal. The payments are made as per one's convenience, which gives the fraudsters ample time to execute their plan. It was decided to tighten the payment system, by fixing the maximum time-limit for making payments," he said.

It was also decided that the traders federation would ask the associations of all textile markets to collect the biodata to the traders, which could help in tracing them if they vanished. The associations were also asked to collect the permanent account number of the firm owners.

The issue of Economic Offence Wing (EOW) also figured in the meeting. "Police are not always equipped to handle cases relating to economic offences. The textile industry of Surat has been demanding a separate EOW, which would deal only in economic offences, since a very long time.

Despite several assurances, the state government has not yet fulfilled the demand. A decision to raise the issue at the highest level, and ensure that the demand is fulfilled this time, was taken in the meeting," traders federation vice president Devkishan Manghani, said.

"Several times, the textile firms which vanish from the city, come back within the gap of a few months after paying 20 or 25 per cent of the total dues to the creditors. There is all likelihood that the firm would again vanish, so it was decided during the meeting to make sure that such firms are not allowed to restart their business in the city," Manghani said.

In addition, the industry also decided to constitute an action committee. The 15-member committee, comprising leading weavers, traders, processors and commission agents, would focus on the other measures required to curb the instances of vanishing firms, and make suggestions accordingly.

The committee would also suggest ways to restore the atmosphere of trust, which has been terribly shaken on account of the numerous vanishing firms, in the industry.