An umbrella organisation of workers’ unions has sought action against all those involved in the corrupt liquidation of two paper mills in Assam, paving the way for one of India’s two major indigenous semiconductor plants.
Demanding an independent probe under judicial monitoring to uncover further instances of corruption linked to the liquidation, the organisation also called for the seizure of all movable and immovable assets connected to the case to ensure accountability.
The demands followed the decision of the Insolvency and Bankruptcy Board of India (IBBI) to suspend the registration of Kuldeep Verma for serious misconduct during the liquidation process of the plants of eight companies.
The plants included the Nagaon and Cachar Paper Mills of the Hindustan Paper Corporation Limited (HPCL), which were acquired by the Assam government in March 2022 for ₹375 crore. More than 550 acres of the erstwhile Nagaon Paper Mill at Jagiraod, about 55 km east of Guwahati, were handed over to a subsidiary of Tata Electronics for ₹1 per bigha (0.62 acre) to set up a semiconductor plant.
Multiple violations
On April 7, the Disciplinary Committee of the IBBI suspended Mr Verma’s registration for two years after finding him guilty of violating the Insolvency and Bankruptcy Code and associated regulations. The suspension will take effect 30 days from the IBBI’s order.
The violations included failure to preserve and protect the assets of the corporate debtors during the Corporate Insolvency Resolution Process period in the cases of KS Oils Limited and Jalan Intercontinental Hotels Pvt Ltd, non-determination of avoidance transactions, diversion of funds in HPCL, improper adjudication of claims, and overcharging of fees in the matter of Jaypee Infratech Ltd.
A professional member of the Indian Institute of Insolvency Professionals of ICAI (Institute of Chartered Accountants of India), Mr Verma was appointed by the IBBI’s adjudicating authority on different dates to handle the assignments of eight corporate debtors, including the HPCL.
“Cheap sell-off”
The Joint Action Committee of Recognized Unions (JACRU) of Nagaon and Cachar Paper Mills hailed the IBBI’s decision as a step toward justice. It accused Mr Verma of disregarding the directive of the National Company Law Appellate Tribunal on May 29, 2019, to maintain the HPC as a going concern.
“Instead, his liquidation process saw assets of the HPCL worth ₹5,000 crore being sold off at throwaway prices, dealing Assam’s industrial future a massive blow,” JACRU general secretary Ananda Bordoloi said.
JACRU president Manobendra Chakraborty said the liquidation left unresolved liabilities of only ₹98 lakh while rendering thousands of workers jobless. “The planned death of the paper mills severely impacted more than 2 lakh families and snatched employment opportunities for Assam’s youth,” he said.
According to Assam Chief Minister Himanta Biswa Sarma, the semiconductor plant coming up on the land where HPCL’s Nagaon Paper Mill once stood would be a game-changer for industry in India.
“Our vision is to ensure Assam emerges as a global semiconductor hub,” he said.
Worth ₹27,000 crore and projected to generate 30,000 jobs, the semiconductor plant at Jagiroad is one of two chip and testing units being set up by Tata Electronics. The other one is at Dholera in Gujarat.
