After Jessop list, Railways to keep raw material, auction off the rest

KOLKATA: Once the representatives of Jessop, BHEL and the railways – as directed by a court order – prepare an inventory of the articles inside the Jessop factory, the railways will keep the raw material and auction off the rest.

“The money collected will be kept in a fund,” a source said.

CID officials pointed out that the auction should be carried out at the earliest as the Jessop authorities might not take any step for the safekeeping of the stock at the material. CID sources insisted that the fresh questioning of Ruia Group chairman Pawan Ruia led them to identify a few people to whom some Jessop officials sold off certain items as scrap. “Ruia is still not co-operating. But we have certain leads. At present, we are carrying out a financial audit of Jessop through external agencies. If we find that these scrap sales were not entered into company accounts officially, we might question some of the buyers,” a CID official said.

The audit completed so far showed that the PSU, Jessop & Company , was in dire straits. For Jessop, the oldest engineering firm in India, life had come to a full circle with the state government taking over the management on February 27, 2016. Jessop, known for its construction of the Howrah Bridge, Parliament House and the first EMU coach in India (in 1959, before the Integral Coach Factory) became sick and was referred to Board for Industrial and Financial Reconstruction (BIFR) in 1995. By 2003, Jessop had a negative net worth of Rs 358 crore and that, perhaps, led to the strategic divestment decision of the company in August 2003.Ruia Cotex of the Pawan Ruiacontrolled Ruia Group bought controlling stake in Jessop for a paltry sum of Rs 18.18 crore. After that, things started looking up for Jessop for some time.

A former director of the Ruia Group said Jessop inherited orders for wagons and Rs 10 crore that was lying with Bharat Bhari Udyog Nigam Ltd, then holding firm of Jessop. “The first three-four years were good. But things deteriorated as the promoter lost interest,” a former director said.