After getting custody of 25 paintings of late MF Husain following a prolonged legal fight, the National Agricultural Cooperative Marketing Federation of India (Nafed) has approached the sheriff of Mumbai for permission to auction them.
After getting custody of 25 paintings of late MF Husain following a prolonged legal fight, the National Agricultural Cooperative Marketing Federation of India (Nafed) has approached the sheriff of Mumbai for permission to auction them. The bidding proceeds, according to sources, could be over Rs 100 crore.
For the last many years, the agri cooperative, which has been facing mounting debts because of its failed tie-up business with private parties, including Guru Swarup Srivastava of Mumbai-based Swarup Group of Industries, had been fighting the Swarup Group over the legal possession of the artworks by the maestro.
“We have asked the sheriff of Mumbai to auction the paintings and the proceeds would help us in revamping our operations,” said Nafed managing director Sanjeev Kumar Chadha. The sheriff of Mumbai is empowered to carry out orders of the high court relating to attachment of the properties and order auctions.
More than a decade ago, Nafed in collaboration with banks, had provided R235 crore to the Swarup Group, without any collaterals, for exporting iron-ore between April and August 2004. Srivastava subsequently had purchased the Husain paintings, whose ownership was being contested in the court till now.
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Under the tie-up business, Nafed stood guarantor to unsecured loans of R3,900 crore availed by 29 private companies for undertaking exports in agricultural and non-agricultural items during
2003-2006. As several of these debtors including the Swarup Group defaulted, the onus of interest payment fell on Nafed, which had a crippling impact on on the operations of the agricultural cooperatives business.
Although Nafed, which procures mainly oilseeds, pulses and copra from farmers on behalf of the government when the prices of the commodities fall below the minimum support price (MSP), could recover a major chunk of loans taken by these private entities, a remaining principle amount of around R500 crore rose to more than R1,000 crore because of interest accumulation.
Eight banks which granted the unsecured loans to private parties have recently agreed to a one-time settlement amount of R478 crore which the Centre is expected to provide to Nafed as interest-free loans shortly. The one-time interest-free loan will be against hypothecation of original title deeds of 17 freehold Nafed properties. The agri cooperative would be returning around R50 crore annually to the Centre against the loan.
Under Nafed’s revival proposal cleared by the finance ministry and which is currently being examined by the law ministry, the Centre would also provide a grant of R30 crore annually for the next five years to the farmers’ cooperative.
Under the price stabilisation fund, Nafed has already purchased 70,000 tonnes of tur from farmers while aiming to purchase 4 lakh tonnes of tur in ongoing kharif marketing season. After the last three years of sluggish performance, Nafed’s turnover in the current fiscal is likely to see a sharp increase to R4,000 crore from only R450 crore reported in FY16.