The Telegraph
Since 1st March, 1999
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Centre sits on sick unit status

New Delhi, Dec. 29: The Centre’s flip-flop on divestment has made the future of National Instruments Limited in Calcutta uncertain.

A public sector unit under Union ministry of heavy industries and public enterprises, National Instruments produces night-vision devises and other defence equipment. After incurring a loss of Rs 54.76 crore in 1992, the unit was declared sick and a case for winding it up was filed before the Board for Industrial and Financial Reconstruction.

Since then, there has been confusion over the Centre’s intentions about the unit.

In its last order on September 30, 2002, the BIFR paved the way for closing down National Instruments. “The promoter (government) has not shown any necessary seriousness in the implementation of the (revival) scheme sanctioned by the board and, besides non-compliance of the direction, they had not even responded to the proposed showcause notice for winding up of the company,” the BIFR order read.

“No senior official of the Government of India was present at the hearing, leading the bench to believe that the survival of this sick company was no longer a priority for the government.”

The government, however, took a different stand two months later. On November 25, it said in the Rajya Sabha that it was reviving National Instruments. “The government decided on June 18, 2002, regarding financial restructuring” of National Instruments and in favour of the “extension of budgetary support to it”, minister of state for heavy industries and public enterprises Vallabhbhai Kathiria said.

Now, the government has allegedly prompted the company to challenge the BIFR order. The unit’s workers’ and officers’ union filed a petition before the Appellate Authority for Industrial and Financial Reconstruction last week, seeking a stay on the BIFR order. It will come up before the authority in a month.

The counsel for the union, Puneet Mittal, said: “The government has been taking contradictory stands in this case. On one hand, they move BIFR for winding up the company. On the other, they take a Cabinet decision to inject life into it. And even that they don’t inform the BIFR.”

In its meeting on June 18, the Cabinet had approved the financial restructuring of National Instruments, subject to a joint venture formation. But it did not clear the cloud surrounding the unit, as it added that in the event of a joint venture not happening, closure action may be initiated.

The BIFR proceedings, which dragged on for years, indicate that the government allowed the issue to hang fire. In January 1994, the BIFR had said the company should pull its shutters down, given the government’s reluctance to revive it. But, in 1997, it gave a chance to the unit following submission from the company and its union that a rehabilitation package was being worked out.

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