Financial Daily from THE HINDU group of publications
Saturday, Jul 24, 2004
Kerala: Autokast employees worried over delay in clearing revamp plan
Kochi , July 23
THE delay in clearing the proposal submitted by the expert committee of the Save Autokast Forum (SAF) to revive the ailing State-owned Autokast Ltd in Alapuzha district, has worried its employees.
The deadline set by the BIFR for submitting a viable proposal has expired on July 13.
The BIFR in its last sitting on June 29 had asked the Government of Kerala to submit a viable revival proposal in 14 days, and in the event of failure to do so, the unit would be ordered to close down without notice.
The State Government, which has accepted the proposal of the expert committee, had sent it to the finance department for its concurrence.
"Even after the expiry of the deadline it has not been cleared by the finance department," said Mr Jayachandran, General Secretary, SAF. "The employees are worried over the inordinate delay in clearing the proposal," he said.
However, the Government had sent a communication to the Operating Agency (OA), the State Bank of Travancore (SBT), stating that it was studying the proposal and require some more time before taking a final decision. Based on this, the BIFR would be requested to grant some more time, he said.
The BIFR had already show caused that the banks can order closure of the company to sell the assets to recover the loan amount of Rs 5.22 crore and interest from 1985 in case the State Government fails to submit a revival programme for the AKL and has not deposited 25 per cent of total amount with the OA.
He said that the company with a paid up capital of Rs 17.97 crore had an accumulated loss of Rs 107 crore and a negative net worth of Rs 88.70 crore as on March 31, 2002. The closure of the company would render 350 employees jobless, he said.
Two attempts, he said, were made earlier to revive the unit, but they failed.
According to him, foundry business is going well, following the revival of manufacturing and transportation sectors. If working capital constraints are eased and the company was freed from previous accumulated losses AKL could start earning profits, he claimed.
Given this situation, the expert committee constituted by the SAF has prepared the "viable revival package", which was submitted to the Industries Department in November 2003.
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