NTC rapped for selling surplus land at cheaper rates

The Comptroller and Auditor General of India (CAG) has pulled up the National Textile Corporation (NTC) for violating government guidelines while selling surplus land and buildings at much lower rates than the market value for the period up to March 2008.

The NTC indictment is part of a CAG report that sees a gap of about Rs 6,200 crore in the accounts of eight government-owned companies.

NTC has 119 textile mills under it. The Board for Industrial and Financial reconstruction (BIFR) has approved a revival scheme under which 77 unviable mills are to be closed and rest being revived. The funds raised from the sale of surplus land and assets are to be used to revive the sick units.

The CAG has also charged NTC with under-fixing the reserve price by Rs 493 crore in five cases of selling land in Mumbai where minimum assured return (MAR) was received. Of the 25 land parcels, MAR was obtained in five cases, but CAG did not find these MARs realistic as the selling value was higher than the MAR by 94 per cent to 279 per cent.

The CAG also found discrepancies in the tender process as the company didn’t have any system for verifying the contents of tender documents and NTC incurred a loss of Rs 185 crore in three cases where documents were incorrect or concealed vital information, said the report.