The dispute between Jessop & Co and the West Bengal government over disinvestment has been resolved with the state government reconsidering its demand for the central counter-guarantee for the Rs 38 crore loan to Jessop.
The state government has agreed to Bharat Bhari Udyog Nigam being a witness to the signing of the guarantee paper with Jessop. Bharat Bhari Udyog Nigam is the holding company for Jessop.
The issue was resolved at a meeting held before the Board for Industrial and Financial Reconstruction (BIFR) today.
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Though the BIFR is yet to clear the disinvestment proposal, it has asked Ruia Cotex, new promoter, to respond to some employee-related issues in the next 48 hours. The Board has also asked Punjab National Bank, one of the company's creditors, to decide about a concession to the company within 15 days.
Jessop's disinvestment process ran into trouble, with the West Bengal government demanding that Ruia Cotex give a bank guarantee of Rs 38 crore against a loan of the same amount the company owed the state government.
The issue had come up at a BIFR hearing on Jessop's disinvestment on July 18. The board had given the state government 10 days to reconsider its demand.
The government had identified Ruia Cotex as a prospective buyer.
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