Apr 6: The financially stifled Indage Vintners may have difficulty finding a suitor but there is no dearth of people willing to file suit against the company, the latest being the Himachal Pradesh government which seems to have reached a dead-end in making the company stick to the contract and may soon file a suit against the company, though it would appear rather late in the day for any recoveries, comments Subhash Arora
Himachal Pradesh is considering action against the erstwhile leader now in shambles, as it has failed to start two wineries in the state, according to the statement of Horticulture Minister Narender Bragta on Sunday. No prizes for guessing that the company has failed to make the full payment for the land provided by the state for setting up these wineries, according to mangalorean.com.
"We have given an opportunity to Indage officials to clarify their stand for defaulting on land payment and for the abnormal delay in starting the apple and grape wine units," Bragta reportedly told India’s premier news agency, IANS, confirming that a Show Cause Notice had been issued to the company to that effect.
Indage still possesses 55.7 bighas (around 22.3 acres) of land at Nagwain in Mandi district in Himachal Pradesh for setting up a winery and 14.10 bighas (5.7 acres) at Pragatinagar in Shimla district for a unit to make apple wine. The company was to make a total payment of only around Rs.10 million for the Nagwain land and Rs.1.9 million for the land at Pragatinagar. It has so far deposited only 20% against the former while 30% has been made for the latter.
According to the original agreement signed by the then government in 2000, Indage and an overseas partner have 30% each, the Himachal government and the state-run Himachal Pradesh Marketing Corporation (HPMC) with 10% share each and the rest of 20% being with the farmers. In 2005, the then Congress government reportedly signed a new agreement under which the project was to come up in private sector only and the government withdrew its share.
The state government is apparently thinking of cancelling this agreement with the company. "We are even ready to move the court to get back the land," Bragta said.
Although the state officials are meeting the company officials for a settlement, it would be difficult to come to an agreement as the company does not seem to have the resources to start the winery. The government may not be able to recover any money from the debt ridden Indage thought there are good chances that the land would revert back to the state. Any penal clauses would be effective on paper only.
During my visit to the Nagwain area last year, I had met their local representative who had sheepishly confirmed when I asked directly, that he had not received salary for the previous several months. But he seemed to be too charmed by Mr. Sham Chougule, Chairman of the company, to even imagine that he might never get his salary. Much water has flown over the head since then. The company has suffered huge losses, a case for winding up is lurking and the shares were de-listed last month on the Mumbai Stock Exchange after hitting the low of less than Rs.13. Unless the stock exchange listing conditions including the submission of last quarter’s Profit and Loss Statement are met, it is unlikely that the Exchange would allow the trading of shares, the value of which in any case will depend upon the perception of company’s future.
An email to Ranjit Chougule, the Managing Director remains unanswered. Perhaps, he is travelling; it could not be confirmed if he was there at the Prowein Fair in Germany held on 27-29 March, where Indage was one of the 8 participants at the Indian pavilion erected by the Indian Grape Processing Board of which Mr Sham Chougule is also the Chairman.
It looks like Indage is about to hit another road block that it may have to negotiate on its way to the hopeful recovery.
4 April, 2011