Novemebr 2: Khatau Makanji Spg & Wvg co workers have submitted a Rs 21.42-crore rehabilitation package to the monitoring agency, Industrial Credit and Investment Corporation of India (ICICI).

The workers have set up a cooperative society styled Kamgar Kapad Utpadak Udyogik Sahakari Society (Kkuuss) to run the company which has been closed down by the management since February this year. Sources said the rehabilitation package is likely to be discussed at a hearing before the Bifr on November 13.

All employees would join the workers cooperative society and contribute Rs 5,000 each from their Provident Fund. A spokesman for the society said Rs 3 crore was expected to be raised as workers contribution to its capital.

The society has approached the state government for equity contribution of Rs 1.50 crore which is yet to take a decision. Top sources said the government would like to examine the rehabilitation package and the viability of the workers cooperative to run the company.

The new society has also approached the Industrial Development Bank of India (IDBI) to contribute Rs 1.50 crore as loan. According to the standard package of the state government, IDBI was required to give an equal contribution as that of the latter.

The company was eligible for interest-free sales tax loan of Rs 1 crore as incentive for the revival. Besides, Rs 9.56 crore would come from internal accruals, Rs 3 crore from the National Renewal Fund and Rs 1.86 crore from other sources.

Kkuuss would take over the assets of the company on lease initially for a period of a year while the equity of the promoters would also be taken over at a price to be decided by the bench of the Mumbai high court.

A spokesman said the society would set up a board of directors consisting of workers/staff representatives, professional textile experts to be nominated by the state government, representatives of banks, financial institutions and the Bifr. The board would also comprise a professional managing director/chief executive and senior executives for production and marketing management.

The society would use existing marketing channels to achieve projected levels of sales. It would guarantee the projections of cash flow and also undertake to meet shortfall in resources for financing the requirement of funds toward capital expenditure. "In case the projections do not materialise to the extent envisaged, the shortfall in the projects shall be met by Kkuuss by bringing in interest-free funds," a spokesman added.

It may be mentioned that the wages/salaries and other statutory dues totalling Rs 18 crore were outstanding and were to be paid to the employees. The management has also not paid wages for the last 18 months and ad hoc wages of Rs 175 per month to all workers totalling 6,000 as per the agreement.

The management had to pay workers worth Rs 2.50 crore towards the salary for February following the directive from the Mumbai high court. Ironically, the management has closed down the mill without declaring lock out since February. Moreover, the Bifr-approved rehabilitation package has been a non-starter as the management has failed to make its contribution of Rs 15 crore.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.