The Hindu : Mixed reaction to KSO closure

Online edition of India's National Newspaper
Wednesday, Oct 23, 2002

Southern States

Southern States - Kerala

Mixed reaction to KSO closure

By Our Staff Reporter

KOZHIKODE OCT.22. The State Government decision to close down the oldest soap factory in south India, the Kozhikode-based public sector undertaking Kerala Soaps and Oils Ltd.(KSO), has been met with mixed reaction here. Certain sections term the step as unfortunate, brought about by lack of strategic policies, gross mismanagement and apathetic marketing drives, while others have taken a resigned view on the ground that KSO is a unit incapable of being put back on the rails.

The coordinated committee of workers at the general body meeting here has expressed strong protest against the decision of the State Government to close down the unit in the guise that it has been operating on accumulated losses, and hence unviable.

The workers will hold a dharna in front of the RDO office on October 26, and organise a signature campaign to be submitted to the Chief Minister. A KSO Protection Committee would be set up with persons from all walks of life.

The KSO closure is in keeping with the directive of the Industries Department under a Government Order dated October 5, when revamping has been suggested in the case of ten other PSUs in the State.

As per the department order, `KSO does not operate in any core sector, and is highly unviable. The company will be closed down with immediate effect and the employees brought under a social safety net. Sale of assets of KSO will be done to recoup the cost of closure including settlement of dues to KSEB. KSEB shall waive minimum demand charge for the period of stoppage of operations and interest dues. Sales tax dues will be settled at principal from the sales proceeds.'

The order further says that the enterprise has been incurring cash losses continuously since 1985-86. The net worth as on March 31, 2001 is around Rs.5,537 lakhs against equity capital of Rs.300 lakhs.

The KSO now has 240 personnel on its rolls. The workers of the unit are to be brought under a scheme of rehabilitation of the Asian Development Bank of India. The salary for employees is pending for the last 11 months, sources add.

According to the KSO Managing Director, K.C.Hariharan, the unit owes Rs.1.4 crore to the Kerala State Cooperative Bank, which was only Rs.22 lakhs in 1982. What is being contemplated is a one-time settlement. Now, the losses of the company totalled to Rs.55 crore with interest accumulation, which in 1992 was Rs.22 crore.

KSO, which was closed down in 1992, was reopened in 1996 when Susheela Gopalan was the Industries Minister. Had a concerted effort been made to restructure the company, it would not have deteriorated to the present condition.

The State Planning Board has directed that the audit proceedings of the unit be completed on an urgent basis. Mr.Hariharan points out that since 1996, no audit has been carried out.

The department has directed that the assets of the company be to be sold in a transparent manner at the earliest. The proceeds are to be used for paying the monetary dues to the employees, as well as the arrears to the Kerala State Electricity Board (KSEB).

The assets of the KSO include the 11 acres of land, with four acres at Gandhi Road, three acres at Vellayil Oil Division, and four acres at the West Hill Soap factory.

Meanwhile, allegations are rife that there is a calculated move in certain quarters to usurp the land in the possession of the KSO.

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