Reeling under a financial crisis,agri cooperative Nafed on Thursday agreed to offer 51%equity to the government in lieu of a Rs 1,200 crore bail-out package.
“We are not in a position to run the organisation on our own. So,we accepted all the conditions,including 51% equity to the government,to get the financial package,” Nafed chairman Bijender Singh said when asked about the outcome of the agri cooperative’s board meeting held here on Thursday.
The meeting was called to consider the conditions stipulated by the agriculture ministry for extending a financial restructuring package to the National Agricultural Cooperative Marketing Federation of India (Nafed),which has incurred huge losses on tie-up businesses.
The agriculture ministry agreed to consider their demand on the condition that the government’s equity shall be maintained at 51%till all the dues are repaid by Nafed. During the 2003-06 period,Nafed provided financial support worth Rs 4,000 crore to 62 private parties for trading of various non-agricultural commodities.
Out of that,29 private parties turned defaulters,which resulted in a loss of Rs 1,600 crore for Nafed as of May,2010.