Shree Synthetics' Ujjain unit to be liquidated

With the Kolkata High Court order directing the Ujjain unit of Kolkata-based Shree Synthetics to be wound up and the court also ordering that an official liquidator take possession of the assets of the unit, another Rs 87.74 crore (at present Rs 203.43 crore) firm, which employed 1,700 people, has died a slow death.

All this has happened when MP Chief Minister Shivraj Singh Chouhan is busy in talks with foreign investors.

Promoted by Shreekant Bangur in 1972, the Ujjain unit of Shree Synthetics, set up to manufacture nylon yarn and polyester yarn, lost power connection in 2004 because dues were not paid and was declared closed on April 27, 2004.

The state government reportedly had given a fresh lease of life to the company on November 1, 2004. Again it was declared temporarily closed on January 28 last year.

On December 16, the Kolkata High Court ordered appointing a liquidator. "In view of the opinion of the Board for Industrial and Financial Reconstruction (BIFR) under Section 20(1) of the Sick Industrial Companies (Special Provisions) Act, 1985, and also in view of the fact that the appeal preferred against the order of the BIFR before the Appellate Authority for Industrial and Financial Reconstruction has been dismissed, the company is directed to be wound up," the High Court ordered.

"The official liquidator has taken possession of the assets of the company yesterday," said an industry source who once had evinced interest in the company.

The State Power Board had severed the connections when the company had not paid power bills of Rs 64.50 crore. The state government had refused to extend financial assistance to the company.

The company had demanded exemptions from payment of Rs 1.10 crore as electricity duty and cess. It had also urged the state apex empowerment committee on investment to adjust the amount in the power bills of November 2004 and November 2005.

The company had also asked to freeze the levy of electricity duty and cess in the fresh power bills. Finance department refused to bail out the company although department of industry and energy had agreed upon offering some exemptions to avert its closure.