Corporate houses setting up steel, aluminium, power and cement projects in Odisha have raised Rs 52,423.50 crore as bank loans, mortgaging the project land in the state.
The Comptroller & Auditor General of India(CAG), however, has questioned the legal sanctity of the land documents based on which the loans were obtained.
What is a matter of serious concern for the banks is that the loan amount has not been invested in the projects that are supposed to come up on the mortgaged land.
Stating that the corporate houses have availed the bank loans on the basis of a no-objection certificate (NOC) issued by the Odisha government-owned Industrial Infrastructure Develoment Corporation (IDCO).CAG pointed out that even though the IDCO has allotted the lands to the industrial houses for the projects, it has no authority to issue NOC for mortgaging the land.
IDCO has sub-leased the land to the promoters of industries after taking the same on lease from the state government. Since, the state government is the owner of the land, IDCO cannot give the NOC without the power vested with it by the state government, the CAG has clarified.
?IDCO irregularly conferred mortgage rights in the lease deeds executed with 52 MoU based and 54 non-MoU industries while handing over the possession of 46,732.894 acres of land, even though such power was not vested with the IDCO by the state government. Besides, IDCO irregularly issued No-Objection Certificates(NOC) to 26 MoU based industries for mortgaging 13846.238 acre land allotted in order to raise loans form financial institutions, even though it was not authorized to do so.?
?Audit further noticed that on the basis of NOC issued by IDCO, loans of Rs 52,423.50 crore was sanctioned by financial institutions in case of 12 promoters of MoU based industries for mortgage of 8489.828 acre of allotted land.?
The CAG has found that the promoters of these industries have availed loans to the tune of Rs 36,840 crore out of the total sanctioned amounts.
Expressing concern over the fact that the land mortgaged is yet to be used by the project promoters, the CAG has observered, ? The IDCO unauthorizedly issued such NOCs, thereby enabling industries to raise loans on the basis of land allotted for industrial purpose, without adequate safeguards to ensure that such capital would actually be used in the industrial projects concerned.?.
The CAG has pointed out that 24 of the 52 MOU companies those have provided 11,447.449 acre land remained unutilized and commercial production was not started. The companies those defaulted in land use are Posco-India, Tata Steel, Aditya Aluminium, Bhusan Energy, GMR Energy, Essar Steel, KVK Nilachal Power, Monnet Ispat, RSB Metaltech, Uttam Galva, Ultratech, Visa Power, Brahmani River Pellets, Rungta Mines, Sahara India and Jindal India.
