| The ailing Metal Box India Ltd (MBIL) has sold off its factory land at Faridabad in Haryana to shoe maker Lakhani India Ltd.
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| According to the employees of the company, this sale violated the updated draft rehabilitation scheme (DRS) sanctioned by Appellate Authority for Industrial and Financial Reconstruction (AAIFR) for the company in October 2000.
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| The promoter of MBIL, Vinod Krishna, was behind the sales, said the employees.
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| According to the documents available with Business Standard, MBIL sold the 7.25 acre plot near Faridabad on April 16 of this year.
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| It was sold at a price close to Rs 10 crore.
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| Some employees of the Faridabad unit of Metal Box were likely to go to court against the sale alleging it was violating the AAIFR order.
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| "We have already send a legal notice to Vinod Krishna regarding the sale," an official of the Metal Box Workers Union said.
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| The employees also alleged that State Bank of India (SBI), as one of the leading lenders, had already filed a complaint to ICICI Bank, the monitoring agency for the implementation of MBIL scheme, saying that the company was not co-operating with the bank.
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| The SBI complaint was filed on May 22, 2006.
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| The latest DRS sanctioned by AAIFR envisaged that restart of operations of four units at Deonar in Maharashtra, Chennai, Faridabad and Kolkata in a phased manner.
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| MBIL had a total of eight units, with one located at Bangalore, three in Maharashtra, one each in Tamilnadu and Haryana and two in Kolkata.
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| "The sale of Faridabad land is a gross violation of the AAIFR order, which is a quasi-judicial body," an official of MBWU alleged.
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| He pointed out that under the profitability projected in the last DRS, the net worth of the company was to turn positive by the end of third year of implementation of the scheme. The accumulated losses were expected to be wiped out in the fourth year.
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| In a parallel development, SBI, IDBI and IFCI complained to BIFR that the company was not paying the pro rata shares of the sale proceeds of the company's assets to the financial institutions.
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| BIFR had already conveyed this to the ministry of commerce and industry.
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| "SBI has complained that monitoring agency (ICICI) is not convening the joint meeting despite repeated requests," said the official. |
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