Govt in soup over NIDC liquidation

Himalayan News Service

Kathmandu, June 9:

Employees and shareholders of the financially crippled Nepal Industrial Development Corporation (NIDC) have criticised the government’s ‘unjustifiable’ move to liquidate the state-owned enterprises. They raised a serious concern over the government’s decision to liquidate the NIDC by the end of 2004-05, which they claimed was based on ‘mal-intent’ and biased report by the international consultancy firm — PriceWaterHouseCoopers Ltd. On February 12, a cabinet meeting decided to liquidate NIDC issuing an 11-point decision based on the recommendation made by the PriceWaterHouseCoopers under Financial Sector Reform Programmes. “The study report is totally biased and backed by conspiracy of ‘financial mafias’, who are employing every possible means to loot the public property,” blamed Manoj Kumar Bhattarai, an official at the NIDC at an interaction held here today. He also criticised the consultancy firm that didn’t follow the terms of reference set by the Asian Development Bank (ADB), which financed the study, and violated the norms of scope of work. “The report stated that NIDC has 98 per cent non-performing assets (NPA), which is totally false,” Bhattarai added.

“The report has no logical ground to recommend the liquidation,” he said. As of the fiscal year 2001-02, a total loss of the corporation was at Rs 991.10 million with a cash loss of Rs 189.76 million. Of the total loss, Rs 801.34 million is of loan loss provision that the NIDC has been allocating for its loan investment according to the central bank’s directives. “Frequent intervention by the government and over politicisation in the last one decade in the board of directors (BoD) are the root causes for the present state of NIDC,” said Bhimsen G C, vice-president of Employees Union at NIDC.

“The recommendation in the report itself is contradictory as it has suggested Rs 300 million for smooth operation of NIDC with reform measures, whereas the liquidation cost has been recommended an additional Rs 610 million,” he said. NIDC has fixed asset worth over Rs 6.0 billion including core asset of Rs 2.25 billion and portfolio asset of Rs 4.0 billion and liabilities worth Rs 1.84 billion.

Echoing the employees’ concern, Bir Bahadur Khatri, a shareholder also lambasted the government’s decision, saying that it would help the financial mafia to swamp over the public property. He also said that he would challenge the government in the Supreme Court, if the decision were not corrected in time. Meanwhile, Buddhi Sedhain, president the Employees Union flayed the cabinet’s decision of laying-off of 73 per cent of employees by the end of current fiscal year, saying it has no logical ground. NIDC is the state-owned industrial development bank, which was established in 2016 BS. It has made investment in more than 150 different industries so far.