Notices to UP firm over KPT money

The Kandla Port Trust (KPT) is up in arms over the recovery of Rs16 crore for a firm set up by the Uttar Pradesh government. The matter has reached the Gujarat high court and justice KA Puj has issued notices to the Uttar Pradesh government, Pradeshiya Industrial and Investment Corporation of Uttar Pradesh Ltd (PIICUP) and the central government pertaining to the matter. Dhaval D Vyas, counsel on behalf on KPT, submitted in court that, in February 2001, KPT had invested Rs7 crore by purchasing 700 bonds of PIICUP of Rs1 lakh each, which had been issued at the coupon rate of 13.75 per cent per annum. The firm had been set up by the UP government to assist in the reform process of public-sector undertakings in the state.

He submitted that KPT received interest till Sept 2002 and when it asked PIICUP about the recovery of the rest of the interest amount, the latter said it would offer only 11% interest. KPT refused the offer and both parties then agreed to the initial interest rate. In May 2008, PIICUP informed KPT that their accumulative losses amounted to Rs407.83 crore, wherein the negative worth of the respondent corporation was Rs272.26 crore, and showed inability to pay the interest amount.