Inquiry ordered into HCL closure

CHANDIGARH, Sept 30: Faced with a slew of allegations about the adverse impact of mismanagement on the public sector Haryana Concast Ltd ...

CHANDIGARH, Sept 30: Faced with a slew of allegations about the adverse impact of mismanagement on the public sector Haryana Concast Ltd HCL, the Haryana government has instituted a high-level inquiry into the circumstances responsible for its closure. HCL was closed on August 26, 1998 after retrenchment of its 300-strong workforce.

Industries Department sources said the inquiry into the charges of 8220;slipshod handling8221; that the Haryana Concast Workers Union levelled against the top management of HCL will be conducted by S Y Quraishi, Financial Commissioner and Secretary Power and Non-Conventional Energy Resources. The probe has been instituted after the HCL employees went to court, seeking action against the management for the mounting losses of the company.

The inquiry, which is expected to be completed in the next two months, will look into the role played by the top management. The workers union has accused the HCL management of inducting second-hand plant and machinery, pursuing wrong marketing policies and failing to motivate the workforce, thereby severely affecting the financial viability of the company.

The company, which was incurring an annual loss of about Rs 4 crore for the last few years, had stopped manufacturing activity in July, 1997. At present, the total liability of the steel rolling company stands at about Rs 24 crore. While the retrenched employees are seeking re-employment, HSIDC officials said the government decided to close the company after making attempts to sell it.

In 1995, the government had found a buyer MS Shoes Ltd, the flagship company of the controversial Pawan Sachdeva Group. But the deal fell through after it allegedly failed to substitute, within the stipulated period, guarantees furnished by HSIDC to the banks for working capital loans and interest. The Delhi firm had paid Rs 7.56 crore at the rate of Rs 12 per share to buy 94 per cent equity in the company. But the amount was forfeited by HSIDC after MS Shoes failed to substitute bank guarantees.

Later, the company was declared 8220;sick8221; for want of working capital and was referred to the Board of Financial and Industrial Restructuring BIFR. The BIFR decided to finalise a rehabilitation package for the ailing company, with 30 per cent assistance from the state government. But the government declined to make any further investment in the company. The BIFR stopped the exercise after a writ was filed in the court against the HSIDC action.