Inordinate delay in recovery led to loss of Rs 17K cr to PSIDC
Inordinate delay in taking over assets of the defaulting units and initiating action against their promoters and guarantors has cost the Punjab Government dearly. The delay led to accumulation of non-performing assets of Rs 17,214.53 crore, according to a report by the Comptroller and Auditor General (CAG) which was tabled in state Assembly today.
The units were funded by the Punjab State Industrial Development Corporation Ltd (PSIDC), a state government enterprise whose main objective is to promote, aid, assist and finance industries for industrial development in the state. To finance industrial activity, the company raised funds mainly by way of share capital and government guaranteed bonds.
The CAG report stated that there were inordinate delays in invoking provisions of SFC Act/SARFAESI Act and in initiating action to take over the assets of the defaulting units.
“There was no system to trace the whereabouts of the promoters or guarantors and their properties for taking timely action to recover the outstanding dues. Lack of action or delay on the part of the company led to accumulation of non-performing assets of Rs 17,214.53 crore,” the report states. Also, the recovery made under various one-time settlement (OTS) schemes was meagre.
According to CAG data, as on March 31, 2022, the outstanding principal loan amount was Rs 100.19 crore and interest was Rs 17,114.34 crore. All these assets were non-performing assets (NPAs).
The report stated that PSIDC had not taken timely action for taking over the assets of the units mortgaged with it as per provisions of SFC Act. Out of the 28 selected cases, assets in 14 cases were taken over after delays ranging from one year to six years and in one case, assets were yet (May 2023) to be taken over. In four cases, the assets were taken over timely.
Audit also observed that pending recovery under Section 29 of SFC (State Financial Corporation) Act, the company has not taken any action simultaneously to recover dues from promoter or guarantors as arrears of land revenue though it was legal to recover the dues from the defaulting unit and from its promoters/guarantors simultaneously.
