The Hindu Business Line : BIFR to hold review hearing on Metal Box

Resolving the deadlock
Metal Box India Ltd has remained closed for many years.
BIFR, it is learnt, has been forced to convene the review hearing at the intervention of the PMO.

Kolkata , Aug. 29

The Board for Industrial and Financial Reconstruction (BIFR) has decided to hold a review hearing of the Metal Box India Ltd after a gap of about three-and-a-half years.

According to a notice issued by BIFR, the review hearing will be held in New Delhi on September 11 and the senior officials of the company along with unions, bankers, FIs and state governmentsconcerned will attend it.

BIFR, it is learnt, has been forced to convene the review hearing at the intervention of the Prime Minister's Office. Early this year, Mr Pankaj Banerjee, the then Leader of Opposition of West Bengal State Legislative Assembly, in a letter to the Prime Minister, had sought his help to resolve the impasse over Metal Box.

The company has remained closed for the past several years - the first factory to close was Kolkata factory in 1987 and the last one to close was Mahul (Mumbai) in 2002. Metal Box had a total of 10 factories spread across the country.

Breaking the impasse

BIFR had issued several directives to the Metal Box management at the last hearing held on March 3, 2003. Thus, the company management was asked to prepare by March 31, 2003, a detailed Public Expenditure Round Table chart and submit it to the BIFR bench, the Monitoring Agency (ICICI Bank) and to all secured creditors, indicating the time schedule for implementation of the each aspect of the rehabilitation scheme as sanctioned by AAIFR (Appellate Authority for Industrial & Financial Reconstruction) in August 2000. The report had to include the number of workers who had applied for or had been given VRS.

In terms of the sanctioned scheme, the Worli property in Mumbai would form a major source of financing. The Monitoring Agency would examine the various agreements in respect of the sale of assets of Worli, the agreements signed with the workers and the time schedule for payment.

Also, based on current and anticipated scenario, the company had to prepare revised projections and submit within six weeks to the Bench and the Operating Agency (also ICICI Bank), with copies to all concerned. The Monitoring Agency would immediately thereafter convene a joint meeting with the unions and others to expedite the implementation of the sanctioned scheme.

However, nothing happened in past three-and-a-half years. The West Bengal Government wrote two letters to the Operating Agency seeking the status report. But the request went unheeded.

In June 2003, the Metal Box Workers' Union wrote to the BIFR seeking its intervention. BIFR asked the Union to approach the Operating Agency. But, the Union's effort yielded no results.