Selling of sugar mills takes a backseat

Therefore,the date for opening of bids is again likely to be extended.

The farmers,who are also the members of the cooperative running the Belrayan sugar factory in Lakhimpur Kheri district,have challenged the government’s decision to transfer the assets of the cooperative sugar mills to private investors in the High Court. According to sources,given the legal issues raised in the litigation,it is highly unlikely that the disinvestment process will conclude in the near future.

The next cane crushing season is coming up in November. The government has issued directions to start preparations for cane crushing in all 28 cooperative mills — including the 15 which were to be sold — from the third week of October. This clearly indicates that disinvestment has now taken a back seat,a source said.

The farmers have said that the amendment in the UP Cooperative Societies Act in 2007 — by which Section 125-A was included to facilitate the process of selling mills — is arbitrary and ultra vires of the Constitution.

While the state government’s equity share in Belrayan sugar mill is 53.65 per cent,farmers hold equity of 46.35 per cent.

The amendment had given the government the power to privatise cooperative sugar mills where its equity holding is 50 per cent or above.

It had empowered also the registrar of the Cane Cooperative Societies to transfer the assets of the societies to a private company without seeking the approval of the board of management committee and the cooperative society’s annual general meeting.

Virendra Kumar,Director of the Belaryan Cooperative Sugar Mill,however,said: “A cooperative society is a democratic institution where all shareholders have equal rights. In our case,the state government is not the owner of the mill,it is just a shareholder.”

Earlier,the Act provided for the liquidation of a cooperative society before the transfer of its assets to any other body.