Indian sugar mills association

Prez`s family sugar unit faces auction

Date:	13 Jan 2012

Source:	DNA

Reporter:	Surendra Gangan

News ID:	845

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Muktabai Sahakari Sakhar Karkhana owes over `60 cr

One of the 15 sugar factories that will go under the hammer after they went into liquidation is under the control of president Pratibha Patil`s family. Sant Muktabai Sahakari Sakhar Karkhana (SMSSK), promoted and chaired by Patil in the late 1980s, owes dues to the tune of more than Rs60 crore to various banks.

The Maharashtra State Co-Operative Bank Limited (MSCBL) plans to auction 15 sugar factories — that went into liquidation — in the fourth quarter of this financial year to raise Rs300 crore as part of its dues of Rs1,752 crore from various sugar factories. Earlier this week, the MSCBL issued advertisements announcing the auction of eight sugar factories.

Muktabai, a Jalgaon-based sugar factory, is now controlled by Patil`s brother GN Patil and his family. After an attempt to sell the factory to a private entrepreneur failed, the MSCBL announced the auction of the SMSSK along with other factories. The management of the factory, which has the crushing capacity of more than 2,500 metric tonnes, made several unsuccessful attempts to sell the factory to settle its dues. The reserve price of the auction of Muktabai is set at Rs46.07 crore by the MSCBL, well short of the over Rs 60 crore dues. “Muktabai is not only a defaulter of the MSCBL, but also owes money to some other banks. The auction will be held for factory land (170 acres), building, plant and machinery with a capacity of 2,500 tonnes crushing per day,” a source from Mantralaya said.

“We expect Rs350 crore to be raised from the sale of 15 factories. The state government is the bank guarantor for the loans given to the factories and hence, we expect Rs275 crore from the government as residual part of the dues of these factories,” said Pramod Karnad, managing director of the MSCBL.

According to estimates, the MSCBL dues come to Rs1,752 crore, including the bank guarantee given by the government to nearly 25 sugar factories that went into liquidation. The MSCB has already sold five factories and recovered Rs275 crore from the state government, including that of the bank guarantee. After the high court`s interim order directing the MSCBL to sell the factories to recover its dues, the apex co-operative bank has initiated the auction of the factories. The court directive came more than a year ago.

“We expect Rs350 crore to be raised from the sale of 15 factories. The state government is the bank guarantor for the loans given to the factories and hence, we expect Rs275 crore from the government as residual part of the dues of these factories,” said Pramod Karnad, managing director of the MSCBL.

According to estimates, the MSCBL dues come to Rs1,752 crore, including the bank guarantee given by the government to nearly 25 sugar factories that went into liquidation. The MSCB has already sold five factories and recovered Rs275 crore from the state government, including that of the bank guarantee. After the high court`s interim order directing the MSCBL to sell the factories to recover its dues, the apex co-operative bank has initiated the auction of the factories. The court directive came more than a year ago.

GN Patil, chairman of the factory and brother of the president, was not available for comment despite several attempts over the phone at his Jalgaon residence for two days.

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