cpi sues Core health care and its directors

http://www.business-standard.com/common/storypage.php?storyflag=y&leftnm=lmnu2&leftindx=2&lselect=1&chklogin=N&autono=198722

CPI sues defaulters in Gujarat

Our Bureau / Ahmedabad August 30, 2005
If defaulters in the state of Gujarat were hoping to do easy deals with banks or financial institutions, they are in for a shock.

The Communist Party of India (CPI), a powerful member of the ruling coalition in the Centre, has started to aggressively chase defaulters by filing cases, causing headaches for companies sitting on depositors' money.

The judges of the City Session Court have directed the Anti Corruption Bureau (ACB) of Ahmedabad to investigate the offenses alleged and to report on the progress of the investigation within two months.

CPI registered complaints against nine companies over long-pending dues to the tune of over Rs 454 crore.

The companies facing such action included heavyweights like Core Health Care, Kanel Oil and Exports Industries, N K Industries, Jay Agro Chem, M Ravji Oil Industries and Torrent Group's Torrent Gujarat Biotech Limited.

Moreover, CPI has included senior officials of the banks and financial institutions in the court case on grounds of negligence.

Officials of State Bank of India, Bank of Baroda, HDFC Bank Limited, ICICI Bank Limited, Industrial Development Board of India (IDBI) and Oriental Bank of Commerce were named.

"Our drive against the number of defaulters is an attempt to set an example in the system so that we can prevent such incidents in the future," commented Ramsagarsinh Parihar, communist leader and general secretary of Gujarat Mazdoor Kisan Parishad while explaining the party in suing defaulting corporates.

"We have no political intention behind taking action against defaulters and we would have done the same thing even if it is Congress whom we are supporting in centre was ruling the state of Gujarat", he added.

CPI had filed the first case against Core Healthcare early this year.

Justice Bankim Mehta then directed ACB to submit an investigation report within three months from the date of issue of the order.

Similarly, Justice K C Brahmbhatt directed ACB in the case of eight companies to submit its investigation report in two months.

CPI has mentioned the figures from the books of banks on which includes principal and interest calculated up to the date of converting it into doubtful loans.The party had launched a movement against Maradia Chemicals Limited for misusing funds borrowed from banks and financial institutions.

According to political observers, CPI had become active in the state by addressing issues related to masses in a state known for its spirit of entrepreneurship.

Recently, CPI decided to create a media cell on the lines of BJP and Congress and brief the press twice a week.

CPI was planning to organise a party congregation in Vadodara next month as well.

Demanding strict action against defaulters, Parihar said the party had filed cases against heavyweights and would file more cases if we find the outcome was positive.

The ruling BJP government in the state was occupied with attracting investors but not bothered about the rising defaults of earlier ventures.

CPI would like the state government to make the records of defaulters public to prevent further losses to the public.

"Converting outstanding in the form of NPA is nothing but a conspiracy between bank officials and corporates", Parihar alleged.

Core Healthcare had defaulted by Rs 315 crore, while NK Industries had defaulted by Rs 43 crore and Gujarat Steel Tubes by Rs 24 crore.

The outstanding of Kanel Oil and Exports Industries was Rs 24 crore, of Jay Agro Chem Rs 20 crore and Torrent Gujarat Biotech Rs 14 crore.

Prarthana Construction owed Rs 6 crore and Nika Tubes Rs 5 crore.