Himachal Pradesh Forest Corporation in a fix over loan without state approval

Highly placed sources said the loan, at 14 per cent interest, was raised from Kangra Coop Bank to disburse payments to some chosen contractors, who had been pressing for their dues to be cleared.

Written by Ashwani Sharma | Shimla | Published: February 14, 2017 3:08 am

THE LOSS-MAKING Himachal Pradesh State Forest Corporation (HPSFC) has landed in a controversy by unilaterally raising a loan of Rs 5 crore at an unduly high rate of interest and without the approval of the state government and reportedly, even that of its board of directors.

Highly placed sources said the loan, at 14 per cent interest, was raised from Kangra Coop Bank to disburse payments to some chosen contractors, who had been pressing for their dues to be cleared.

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The state government is understood to have taken a serious view of the corporation’s controversial move and sought an explanation about the alleged violations. “It did come to the government’s notice sometime ago. We asked the corporation and its managing director to explain circumstances and reasons for taking loan without following due process of necessary approvals,” said Tarun Kapoor, principal secretary (forests),when contacted over the phone.

Officials said Kapoor had written a strongly-worded letter to the MD, HPSFC but by then the corporation had already disbursed the amount. Fearing action, the corporation later returned the money to the bank but not before paying an interest of Rs 1.50 lakh.

HPSFC MD C S Singh confirmed that some borrowings were raised to release payments of contractors and labour. “We have a liability of Rs 28 crore pending to be cleared… Rs 5 crore was released to pay some payments of the contractors and labour before Diwali last year. We don’t need any approval of the government. The approval of the board of directors was taken some 10 months ago,” he claimed. Earlier, the corporation had also made some backdoor appointments despite huge financial liabilities and losses. Around 87 persons were recruited during 2015-16, apparently at political considerations.

Earlier, the Comptroller and Auditor (CAG), in its report this year, had accused the corporation of allowing “complete cartelisation of buyers to sell its timber like deodar and chir resulting a loss of Rs 18 crore in the year ending 2015. The corporation incurred continuous losses during the past four years. Its accumulated loss increased from Rs 31.66 crore in 2010-11 to Rs 52.75 crore in 2014-15, the CAG report revealed.

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