Burn Standard is hoping to come out of the Board for Industrial & Financial Reconstruction (BIFR) now that its Rs 1,337 crore negative networth has been reworked with a revival package comprising a Rs 1,149 crore government loan waiver, Rs 30 crore injection for refurbishment and Rs 20 crore payout for clearing statutory dues.
A railway ministry official told Fe that the company would plead to get out of BIFR in the next BIFR hearing on October 26 on the grounds that it no more has a negative networth and that its books have been showing operating profit for the last five years.
Railway minister Mamata Banerjee in June announced that the ailing Burn Standard would be taken over by the Railways and from September 15 the Railways took over the management control of Burn Standard from Bharat Bhari Udyog.
While WK Pradhan, a railway board member, took over as chairman of the company, managing director SP Bakshi will retire this month. However, the ministry is yet to decided whether the chairman would assume the charge of the managing director or there would be another managing director, the official said, adding that Vinod Kumar has been inducted into the Burn Standard board as the government-nominated director.
While the Burn Standard management would be pleading to come out of BIFR, All India Federation of Burn Standard Officers’ Association(AIFBOA), a party to the Burn Standard’s case in BIFR, would plead for settlement of employees due amounting Rs 132 crore.
AIFBOA’s general secretary, Anutosh Bandyopadhyay, said the officer’s association was in favour of the company coming out of the BIFR but ?we will seek the BIFR’s intervention in clearing the Rs 132 crore employees dues?.
?We would ask the BIFR to direct the department of heavy industries to reimburse Rs 132 crore to the employees. We cannot hold the railways responsible for clearing dues to its employees from 1997 to 2007. The railways will be responsible in implementing the latest pay commission recommendation and clearing our dues since 2007,? Bandopadhyay added.
However, the railway official felt that AIFBOA’s demand won’t be a hindrance in bringing Burn Standard out of BIFR and set it rolling to gradually work in full capacity. Burn Standard has a capacity to make 2,500 wagons every year but it currently has orders to make 1,700 wagons at its two units at Howrah and Burnpur, 1000 (500 each at Howrah and Burnpur) of which the railway ministry ordered immediately after it announced its takeover plan. The company has bagged 700 more orders from the railways via the tender route, the official said.
