Hindustan Motors (HM) has refuted allegations of irregularities in a land deal at the Uttarpara plant in Bengal. The company has been accused by successive state Governments of under-reporting the proceeds from the deal and not investing enough to revive the plant.
HM Chairman Chandra Kant Birla said the company had ploughed all the money back into the plant. The Buddhadeb Bhattacharjee Government had allowed the country’s oldest auto maker to sell a 314-acre plot, 40km from Kolkata, in September 2006. The company had earned Rs.285 crore by selling the land to Shriram Properties, a company based in south India.
“The fund has gone into the Uttarpara plant. It has been audited by the Government agencies,” Birla said after the Annual General Body Meeting of HM in Kolkata on Thursday, August 4. He later clarified that HM’s actual investment by way of capital expenditure in Uttarpara was only Rs.20 crore. “We have put up Rs.20 crore from 2006. We plan to do more but I can’t tell you how much,” he said.
Birla visited the plant yesterday after seven years. “The Uttarpara plant is where I started when I came into business. There have been ups and downs. A lot of effort is being put now. But when we will get the result I don’t know,” he said.
Birla admitted that there were fresh queries by the Mamata Banerjee Government, which plans to probe the conversion of industrial land for real estate by two companies, Bata and HM.
“We are providing clarification from day one (2006). They have recently asked for some more clarification and we are providing them,” Birla said.
Later, CFO Yogesh Goenka said no show-cause notice had been sent to HM. “We have kept the Government in the loop. Twice they have audited how the money was being spent. It was done last time in November 2010,” Goenka said.
HM today reported a net profit of Rs.17.20 crore in the first quarter on the back of Rs.47.63 crore earned from a property sale in Gujarat.
