The Hindu Business Line : Metal Box rehab impasse continues

SEVERAL attempts of the West Bengal Government in the past few months to hold meetings with the management of Metal Box India Ltd to know the status of the implementation of the rehabilitation scheme, particularly with respect to the company's local units, have not yielded results so far, according to State Government sources.

The State Government's anxiety is understandable given that the rehabilitation has remained a non-starter. The Metal Box management had submitted an action plan pertaining to the local units of the company.

The plan presupposed, among others, disposal of equipment and machinery, plant and building of the Number Two unit and disposal of surplus equipment and machinery of the Number One unit and utilisation of the sale proceeds for paying off the gratuity dues to 1,550 employees separated or retired in the past few years. The local units have remained closed for the past 15 years.

The Metal Box management did not act on the plan. Instead, it sought intervention of the West Bengal Government seeking withdrawal of the restriction on the disposal of the redundant assets of the closed units.

The restriction was imposed by the State Government on the grounds that there were huge sales tax dues that the company must clear first.

The management view was that unless the company was allowed to sell the assets as per the action plan, it would not be able to clear the dues.

But the State Government was not convinced because it felt that the sale of the equipment and machinery of units closed for more than 15 years would not generate enough funds to clear all the dues as the plant and machinery had virtually become junk.

The State Government insisted on the promoter's contribution of Rs 30 crore as contained in the rehabilitation package.

As early as January this year, the Industrial Reconstruction Department of the State Government first requested ICICI Bank (ICICI was the operating agency) to do the needful in this regard. A reminder was sent in May but no action was taken.

A meeting was convened by the West Bengal Industry Minister, Mr Nirupam Sen, on July 14 and accordingly Mr Vinod Krishna, the company's Managing Director, was told to attend it.

But Mr Krishna did not turn up as he was out of the country, according to company sources.