Idco breaks silence on CAG report for flouting norms

NOCs enabled erring industrial units to raise loans from financial institutions that did utilise amount for industrial purposes

Barely a month after being rapped by Comptroller and Auditor General of India (CAG) for unauthorisedly issuing no objection certificates (NOCs) to industrial units, the Odisha Industrial Infrastructure Development Corporation (Idco) today broke its silence on the auditor’s observations.

The NOCs issued by Idco, as per the central auditors, had enabled the erring industrial units to raise loans from financial institutions, but not utilise the amount for industrial purposes.

“It is the responsibility of the banks to see whether the loans sanctioned is utilised properly. Our (Idco’s) responsibility is to see that the land is properly utilised, not track the use of money,” said Vishal Dev, chairman and managing director, Idco, clarifying the PSU’s stand on the report.

Dev was speaking at the second day of the 28th annual state level convention and seminar of Odisha assembly of small and medium enterprises (OASME), an association of MSMEs.

Idco can’t be held responsible if somebody misutilises the loans sanctioned, said the CMD adding that the CAG perhaps failed to understand the law properly.

CAG has pointed out that the state run Idco irregularly conferred mortgage rights in the lease deeds executed with 52 MoU based and 54 non-MoU based industries while handing over possession of 46,732.894 acre land without any vested power.

“Idco irregularly issued NOC to 26 MoU based industries for mortgaging 13,846.23 acre land in order to raise loans from financial institutions. Based in the NOCs issued by Idco, 12 companies availed loans worth Rs 52,423.50 crore by mortgaging 8,489.89 acre land allotted to them. Data from the financial institutions showed that out of the sanctioned loan amount, Rs 8,625.89 crore has been released so far”, CAG had stated in its report which created hue and cry in the state assembly.

However, the industry bodies have flayed the report stating that the observations will affect the industrial climate in the state.

For some time, Idco has stopped mutual transfers of land, issuing NOCs and change of names, but now the matter has been sorted out after taking up issue with the advocate general, at the chief secretary level, Dev added.