The Hindu Business Line : Customs dept files appeal for priority on recovery of dues

THE impasse between the lenders and the Government over the sell-off of the assets of Daewoo Motor India shows no sign of abating with the Customs department filing an appeal with the Debt Recovery Tribunal (DRT), Mumbai. The department has claimed first charge over recovery of dues from the sell-off of the assets in its appeal.

"The issue is who should get priority for the recovery of dues. An appeal has been filed for the same," official sources said.

Meanwhile, this comes in the backdrop of a recent DRT order inviting bids from potential buyers for the assets. Banking sources said that the reserve price for the entire assets (including the assembly and the ETA unit) has been kept at Rs 1,103 crore.

However, industry analysts say that there are unlikely to be any bids until matters between the Government and the lending institutions are sorted out, and there is an assurance that the assets would be sold free from any encumbrances.

"There have been notices for bids before. However, no bids are likely till the matter is resolved," an official from a leading auto company said.

General Motors, which had indicated its interest in purchasing Daewoo's assembly unit, too has made it clear that it will not purchase the assets unless they come free of any liabilities.

The company's interest in the purchase of the assets is also waning due to procedural delays and the issues between the Government and the lenders not getting resolved. "We have started looking at other alternatives to expand our operations in the country," a General Motors India spokesperson said.

General Motors had last year said that if the proposed deal goes through, it would use Daewoo's assembly unit at Surajpur for making small cars for the Indian market.

The Government's dues from Daewoo Motor India are in the form of Custom duty claims amounting to over Rs 1,000 crore and also dues resulting from alleged financial mismanagement by the company.

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