Punish all involved in corrupt liquidation of Assam paper mills: Body of unions

Umbrella workers' union demands action against corruption in liquidation of Assam paper mills, paving way for semiconductor plant.

An umbrella organisation of workers’ unions has sought action against all those involved in the corrupt liquidation of two paper mills in Assam, paving the way for one of India’s two major indigenous semiconductor plants.

Demanding an independent probe under judicial monitoring to uncover further instances of corruption linked to the liquidation, the organisation also called for the seizure of all movable and immovable assets connected to the case to ensure accountability.

The demands followed the decision of the Insolvency and Bankruptcy Board of India (IBBI) to suspend the registration of Kuldeep Verma for serious misconduct during the liquidation process of the plants of eight companies.

The plants included the Nagaon and Cachar Paper Mills of the Hindustan Paper Corporation Limited (HPCL), which were acquired by the Assam government in March 2022 for ₹375 crore. More than 550 acres of the erstwhile Nagaon Paper Mill at Jagiraod, about 55 km east of Guwahati, were handed over to a subsidiary of Tata Electronics for ₹1 per bigha (0.62 acre) to set up a semiconductor plant.

On April 7, the Disciplinary Committee of the IBBI suspended Mr Verma’s registration for two years after finding him guilty of violating the Insolvency and Bankruptcy Code and associated regulations. The suspension will take effect 30 days from the IBBI’s order.

The violations included failure to preserve and protect the assets of the corporate debtors during the Corporate Insolvency Resolution Process period in the cases of KS Oils Limited and Jalan Intercontinental Hotels Pvt Ltd, non-determination of avoidance transactions, diversion of funds in HPCL, improper adjudication of claims, and overcharging of fees in the matter of Jaypee Infratech Ltd.

A professional member of the Indian Institute of Insolvency Professionals of ICAI (Institute of Chartered Accountants of India), Mr Verma was appointed by the IBBI’s adjudicating authority on different dates to handle the assignments of eight corporate debtors, including the HPCL.