Nagpur: The Shinde Fadnavis government on Monday strongly defended the establishment of its own Asset Reconstruction Company to take over bankrupt entities belonging to government, public, private or semi-government undertakings. The ARC will participate in the auctioning of such undertakings.
The Deputy Chief Minister Mr Devendra Fadnavis told the state assembly after the issue was raised by the leader of opposition Mr Ajit Pawar that the state government aims that such bankrupt units should not go to the private sector at a throw away price. After taking over such assets, the buyers obtain loans from private banks to restore their businesses and earn profits. Instead, the state government through ARC can restructure such undertakings,’’ he noted.
What will ARC do?
Mr Fadnavis recalled that several bankrupt entities funded by the state government were sold to private entities at a cheaper rate. ‘’As far as the government owned companies, the ARC will carry out restructuring of such undertakings. There are bids out for seven to eight sugar factories from the cooperative sector, which are in deep financial crisis, for sale. The government does not want such companies to be taken over by the private companies at cheaper price,’’ he reiterated.
As reported by the Free Press Journal, the state cabinet in September had cleared the establishment of Maharashtra ARC with an objective of improving the health of the cooperative institutions. The government has provided a share capital of Rs 111 crore to the ARC. The company will take care of the reconstruction of the government entities which have the state government stake in terms of land, equity capital, loan and loan guarantee among others.
Further, the ARC will help the state government to safeguard the investment of the government and the interest of the general public.
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