Poor record keeping of details of guarantors by Punjab State Industrial Development Corporation Limited (PSIDC) resulted in non-recovery of Rs 197.70 crore in loans, the CAG said in its report.
"There were delays ranging from six months to over 19 years in initiating effective action to recover loans from defaulters," the CAG, which submitted its report in Punjab Assembly yesterday, said.
Besides, poor record keeping of details of guarantors resulted in non-recovery of Rs 197.70 crore, the CAG said in its report ending March 31, 2016.
PSIDC was incorporated in 1996 with the objective of promoting, assisting and financing industries through equity investment and disbursement of loans.
"The company (PSIDC) stopped its equity investment activity in 2003-04 and loan disbursement activity in 2006-07 as the liquidity position was strained due to declining trend in recovery of term loan portfolio as well as in retrieval of investment in equity of promoted units," the CAG said.
The net worth of the company was negative at Rs 535.63 crore as on March 31, 2013 which dipped further to (-) Rs 577.98 crore and (-) Rs 615.54 crore as on March 2014 and 2015 respectively.
The audit noticed 14 cases where there were delays ranging between six months to 236 months in taking over the units and of 56 units, involving Rs 2,652.62 crore where proceedings were pending.
Recovery Certificates (RCs) were issued in 46 cases only where Rs 1,592.27 crore was outstanding for recovery (March 2016), the CAG said.
"As on March 31, 2016, 70 per cent of the amount of default in loan cases was in the category of loanee units," it said.
"Poor performance in recovery of investments made in equity and loans and extension of guarantee to the loanee units led to the company defaulting in redeeming bonds," the CAG said.
PSIDC's efforts to raise fresh funds were unsuccessful pushing it further into debt trap, said the Comptroller and Auditor General (CAG) of India.
The audit also observed that the company did not charge any guarantee fee from the loanee units for extending guarantees.
The audit also observed that as per the data of Value Added Tax (VAT) department for years 2012-14, nine units were working and had a consistent turnover ranging between Rs 11.44 crore to Rs 1037.81 crore.
As per company's records, 30 units out of 107 were earning profits as on March 31, 2015. "In spite of that the company failed to persuade these units to buy back their equity shareholding," the CAG said.
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