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JK units in Kota to resume work

By Our Special Correspondent

JAIPUR, AUG. 18. All the seven units of the JK Group of Industries in Kota are scheduled to restart functioning in the next few months following an interim agreement among the company, the financial institutions and the trade unions involved. The units to be reopened would be run on lease for a period of seven years by a different company, Arafat Petro Chemicals Pvt.Ltd.

The seven units, spread around the south west Rajasthan town of Kota, were closed along with the three other JK units in the neighbouring Jhalawar district in 1997 following financial problems. The Kota units, which employed 4,850 permanent workers and 1000 temporary/casual hands alone had a debt liability of Rs.1,280 crores to the financial institutions.

The Jhalawar units are not included in the current package in which the JK Group would make the repayments to the tune of Rs.410 crores to the FIs over a period. The Sir Padam Research Centre, also part of the JK Group in Kota, will not reopen in the current round.

The good tidings for the industrial sector and the workers in Rajasthan came in the form of an announcement at a gate meeting of workers outside the JK Synthetics in Kota this evening. The announcement on the agreement was made by R.K.Swamy, president, JK Staple Acrylic Employees Union and secretary, Centre for Indian Trade Unions, Rajasthan.

The general manager of the JK Group of Companies, Kota, K.K.Garg, also confirmed the arrangement when contacted. Mr.Garg cited the latest meeting of the management, the lease holder company, the FIs and the TUs held on August 11 which had decided on the reopening of the units after the Debt Recovery Tribunal, Mumbai agreeing for the initiative.

The units were formally declared sick by the Board of Industrial and Financial Reconstruction (BIFR) in 1998. Soon, ICICI, one of the major creditors got their premises sealed. Back in 2001 a one-time agreement was reached among the management and the FIs which include, IDBI, IFCI, UTI, LIC, the State Bank groups and Bank of Rajasthan, among others. The parties again met on October 9, 2002.

"It took much more time for the realization of the package as BIFR had since been rendered inactive and the Sick Industrial Companies Act (SICA) too stands repealed. The new entity, the National Company Law Tribunal, which would handle industrial sickness is yet to be formulated,'' Mr.Swamy said referring to the delay in the settlement while talking on phone from Kota.

The Trade Union leader expects the units to start production in another three months time as repairs have to be carried out in the buildings as well on the machinery which had been in a state of disuse for long.

The rehabilitation package for the workers is still pending. Only 30 per cent of the total wages and emoluments amounting to Rs.43.69 crores due to them have been paid so far by the JK Group. Yet it is a new beginning for Kota, the one time industrial hub of Rajasthan.

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