Kerala - Kochi   

Travancore Rayons revival deal defended

KOCHI: Raising allegations against the deal struck between the State Government and the Elanjikkal group for the revival of Travancore Rayons is not in anybody’s interest. These allegations will not help revive the unit which has been closed for six years now, said the Travancore Rayons Employees’ Union (affiliated to the Centre of Indian Trade Unions) in a press release here on Tuesday.

Union general secretary G. Sunilkumar said that some quarters were raising allegations against the move to revive the unit and comparing it to the sale of profit-making public sector units such as Modern Bread and Videsh Sanchar Nigam Limited to the private sector. These allegations are totally baseless and have vested interests behind them, the press release said.

The press release alleged that those “shedding crocodile tears” in the name of the deal to revive the rayons unit had never been on the scene for years together.

The rayons unit started in the private sector in 1960 and operated in profit till 1974. Banks and financial institutions came to the help of the unit under guarantee from the State Government when it ran into trouble. It was referred to the Board for Industrial and Financial Reconstruction (BIFR) in 1986.

Over the next 16 years the company could not be revived and the BIFR issued orders in January 2002 for winding up the unit. The company management and trade unions approached the Appellate Tribunal for Industrial and Financial Reconstruction for a reversal of the BIFR order but their efforts were in vain.

The unit was neck deep in debt owed to banks and financial institutions. Rayons owed the banks and financial institutions Rs.110 crore. It was under these circumstances that the operating agency IDBI went about trying to rope in a promoter for the company. The Coimbatore-based NDEE group was the only one that came forward. A memorandum of understanding between the Coimbatore group and the then United Democratic Front Government was signed in 2004.

Sensing a lack of interest on the part of the NDEE group, the LDF Government began negotiations with the Elanjikkal group. The Elenjikkal group had reached an agreement with banks and financial institutions as well as with trade unions, the press release said.

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