CUTTACK: The State government’s bid to obtain permanent stay on winding up of Orissa Textile Mills (OTM) at Choudwar, which could lead to revival of the mill, moved one step closer on Thursday with its assurance to deposit Rs 115 crore with the office of the liquidator by October 15.
The liquidation process of OTM was started under the Company Judge of the High Court in March 2002 after the State government filed a petition for it after closing the unit in June 2001. The court had recalled the order for fresh auction of the company along with its assets on June 28, 2022 after several attempts at auction failed over the decades.
On August 2, the State government stated before the Court that it would no longer pursue the sale of the assets of OTM. “Instead, the Handlooms, Textiles and Handicraft department is ready to put in Rs 150 crore for obtaining permanent stay of winding up of the company,” the government told the court.On Thursday, the State government agreed to deposit Rs 115 crore with the office of the liquidator. Deposits worth Rs 35 crore have already been made by the government, the court was informed.
Accordingly, Justice Arindam Sinha directed the government to deposit Rs 115 crore with the office of liquidator by October 15 and fixed October 18 as next date for further consideration on the matter.In pursuance to the court’s direction, the office of the liquidator filed an affidavit on Thursday indicating that the total dues which remain to be cleared by the State government was Rs 147.67 crore while Rs 97 crore and Rs 20.30 crore were the dues of employees and their Provident Fund respectively.
OTM was declared a sick industrial company by the Board for Industrial and Financial Reconstruction (BIFR) in 1993. BIFR recommended a Rs 37.22 crore revival and modernisation package for the mill in 1998. But the government opted to declare closure of the mill when it’s worth went in the negative with accumulated loss of over Rs 100 crore and liabilities well over Rs 40 crore.
OTM, incorporated as a public limited company by Biju Patnaik and Pratap Singh, in 1946 had started commercial production in 1950. In 1981, it was taken over by the State government which acquired all its private shares after the private management declared a lock out.