Blame-game over NCLT order on Steel Complex in Kozhikode

INTUC attributes the current stalemate to failure of the State government to implement decisions it had taken along with SAIL to run the company

A blame game has begun over the National Company Law Tribunal (NCLT) recently handing over the affairs of Kozhikode-based public sector undertaking SAIL-Steel Complex Ltd., a joint venture of the Kerala government and Steel Authority of India Ltd. (SAIL), to an official receiver ahead of initiating insolvency proceedings.

While the Opposition-backed trade unions such as the Indian National Trade Union Congress (INTUC) accused both the Union and State governments of ignoring the interests of the employees, those supporting the government chose to blame the Centre for the present situation. INTUC Kozhikode district president K. Rajeev said the current stalemate was not the result of any labour strike. It happened because the State government could not keep some of the decisions it had taken along with SAIL for running the company.

Mr. Rajeev pointed out that the company was located in the Beypore Assembly constituency, now represented by P.A. Mohamed Riyas, Minister for Public Works. However, the decision of the State government and SAIL to buy 30% of the TMT steel bars required for work undertaken by the department from the company was yet to be implemented. Though the employees staged agitations urging the government to reopen the factory, the Industries department did not come up with a comprehensive revival package either.

Those close to the government, however, pointed out that P. Rajeeve, Industries Minister, had convened at least five meetings at the behest of Mr. Riyas to discuss the revival plans for the company. Though the government had written many times to the SAIL authorities seeking details of the technical and commercial possibilities of its products, there had been no response. They also pointed out that as per an agreement with the government, SAIL was supposed to provide billets for the production of TMT steel bars. The required quantity, however, was not provided, which led to the closure of the TMT bar re-rolling mill in 2016.

The NCLT order followed the company’s failure to pay back the ₹45 crore it had taken as loan from Canara Bank that was used to install the re-rolling mill. The company has to pay back around ₹107 crore now. The NCLT took up the case after the bank filed a petition seeking initiation of insolvency proceedings. The company, earlier known as Steel Complex under the State government, was made a joint venture in 2008, after SAIL acquired 50% of its stakes. The re-rolling mill was installed thereafter. The company that had around 700 permanent staff and 300 temporary staff in the 90s, has only around 30 people on its rolls now.