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NJMC gets another shot at revival

Richa Mishra

NEW DELHI, Aug. 16

NATIONAL Jute Manufacturers Corporation Ltd (NJMC) has been given one more opportunity by the Board for Industrial and Financial Reconstruction (BIFR) while keeping its earlier prima facie decision to wind up the company in abeyance.

The Bench took this decision despite the fact that the company and its promoters had unduly delayed the total process of rehabilitation by nearly eight years since the company came to the board.

In the absence of Indian Jute Industries Research Association (IJIRA) report being made available to the board,

BIFR was not in a position to decide the matter of rehabilitation or confirming its earlier decision of winding up, the Bench said.

It directed NJMC to submit a comprehensive note on the issues that would arise with the closure of the company and what impact it would have on the industry and economy.

The Bench also wanted specific suggestions as to why the rehabilitation was needed keeping in view the interest of the company, secured creditors, workers and all others concerned.

Further, the Government, as the promoter, has been asked to indicate specifically as to whether it would be extending needful financial support to the workers' industrial cooperative society (WICS) in case they approached it.

The promoters should also indicate how they will support the cooperative society for the consideration of the transfer of assets, the Bench said. In the case of the unviable units, the promoters are to indicate how and in what manner they will like to gi ve further support to such mills.

The Bench also asked them to indicate whether the Government will subsidise the cost of the scheme during the process of rehabilitation to be done by WICS in case they takeover the viable and unviable units in the event promoters did not want to rehabili tate the company.

Further, the operating agency (OA) has been directed by the Bench to prepare the draft for the issuance of the advertisement for selling of the units with or without encumbrances in terms of the Sick Industrial (Special Provisions) Companies Act (SICA). Also, six weeks' time would be given for getting the responses to the advertisement, the Bench said.

In the event of the OA receiving any viable acceptable rehabilitation proposal from the company and its promoters, it shall consider the same simultaneously with the proposal submitted by the WICS. The proposal could be for the company as a whole or unit wise.

If it was unitwise, how would they like such hiving off/sale and whether the Government was interested in running other mills with a rehabilitation proposal for the overall benefit of the area as also the economy subject to their own macro-policies needs to be stated in the proposal, the board said.

The Bench also said that if no such proposal emerged or no response was received to the advertisement, the OA should inform the board immediately, the Bench said.

``The board, in such circumstances, will confirm the earlier prima facie order of winding up of the company without holding any further hearing,'' the Bench observed. But, if the proposal emerges, the OA will formulate and circulate a draft rehabilitatio n scheme (DRS).

Related links:
NJMC revival, a test case for Centre
Show-cause to be issued for National Jute wind-up

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