The pharmaceutical company which has incurred accumulated losses of about Rs 10 crore during the last financial year, thanks to alleged wanton corruption and mismanagement, was preferred to the Board of Industrial and Financial Reconstruction (BIFR), a couple of years back.

The BIFR appointed Industrial Development Bank of India (IDBI) as operating agency to prepare a rehabilitation report. Consequently, the IDBI conducted a techno-economic viability study of MAPL through an independent agency and also held discussions with the company officials on the possibility for MAPL's revival. However, during the process, the IDBI could not formulate any workable rehabilitation package, as there were no takers for running the loss-making unit.

The Nagpur-based undertaking also made an effortto raise working capital through loans from the local Shikshak Sahakari Bank Limited, SIICOM and other financial agencies, but in vain, thanks to its `dubious' track-record. The financial agencies, including the Syndicate Bank were compelled to waive-off around Rs 8 crore borrowed by the MAPL.

According to available information, the BIFR has formed a prima facie opinion to wind up the sick unit as it was not likely to make its net worth exceed accumulated losses within a reasonable time while meeting financial obligations.

A Board bench, in a hearing recently, noted that there was no rehabilitation proposal with means of finance fully tied up for MAPL, manufacturer of general antibiotics, in spite of sufficient opportunity given to all parties concerned. As a result, the bench said the company, with its around 300 employees, was not likely to become viable in the long run and hence, it was just, equitable and in public interest that the unit be closed down.

The Board has also decided to give a lastchance to the company's shareholders, creditors or employees wishing to make an alternative proposal. The board has fixed the hearing in this regard on June 4 next, after which the BIFR would be free to initiate the process of winding up the unit.

The MAPL was in the news recently when the Central Bureau of Investigation (CBI) and vigilance personnel of Hindustan Antibiotic Limited (HAL), its parent organisation, swooped on the company for alleged corruption and gross irregularities.

The prime target of the probe was the Dharamshala depot of the company in Himachal Pradesh, where pharmaceutical products were shown in records as having been despatched, though there were meagre sales in the region.

As a result, the MAPL had to pay huge amount of sales tax unnecessarily. Later, the depot showed most of the materials sent as having been returned by the purchasers. Other major complaints against the company were: preparing `bogus' invoices and `destroying' expired medicines in the government-ownedpharmaceutical company. The issue even figured in Parliament a few years back.

Besides, the Department of Food and Drugs Administration (FDA), Maharashtra State, the Sales Tax Department and Income Tax Department personnel also reportedly raided the unit during the period and established several irregularities. Senior officials of Vigilance department of HAL were also here to probe the alleged corruption charges, in September last.

MAPL - a joint venture of Maharashtra and Union Government - began its production in 1981 with a share capital of Rs 1.31 crore. The credentials of the company were under cloud from the beginning as `inflated' profits were being projected by the unit, thanks to jugglery in accounts books. But it could not come out from the red despite waiver of crore of rupees of loans by various financial agencies.

The sales figure were being allegedly inflated by producing false invoices in order to show a higher production and profit. Profit, which were shown in its annual financialreports in the recent past, were allegedly manipulated by reducing the figures of doubtful debts.

Meanwhile, panic prevails among employees of the pharmaceutical unit here over the recent notice of closure.