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Timely intervention averted impending loss of Rs 46.75 cr: CAG

Last Updated: Thursday, August 30, 2012 - 18:40

New Delhi: Government auditor CAG on Thursday said an "impending loss" of Rs 46.75 crore as interest due to the HRD Ministry extending a loan to a company could be averted because of its timely intervention.

It said the ministry had failed to follow the general financial rules as suggested by the Expenditure Finance Committee while extending a loan of Rs 100 crore to IIT Madras research park, a company set up under the Companies Act.

The committee, it said, had observed the loan should bear an interest rate as applicable for investment loans to public sector undertakings which was 11.5 per cent per annum.

"... The agreement executed between the ministry and the company in February 2010 provided for levying an interest rate of three per cent per annum against the applicable rate of 11.5 per cent," CAG said in its report ended March 31, 2011 tabled in Parliament today.

It said the repayment of the loan was to commence from 2013-14 for a period of 10 years.

CAG said after the issue was pointed out, "the Ministry replied in June 2012 that the agreement with the company had since been revised and the latter had agreed to pay the interest at the applicable rate of 11.5 per cent, thus an impending loss of Rs 46.75 crore could be averted".

The auditor, in its report on the I&B Ministry, said
rental charges amounting to Rs 60.73 lakh were not recovered by the Films Division, Mumbai from discontinued and closed down theatres.

The cinema houses were to pay rental charges to the division on fixed percentage of their net collections for exhibiting documentaries, news-based and animation films provided by the division.

"Audit scrutiny revealed that between June 2000 and July 2009, 20 and 15 theatres were either discontinued or closed down in Maharashtra and Gujarat respectively and the total outstanding in respect of these 35 theatres on account of rental charges since 1996 was Rs 60.73 lakh," the CAG said.

The Ministry stated that the theatre had closed down without intimating the Film Division.

It further stated that the district magistrates of the districts concerned who were the licencing authorities, had been requested not to renew the licences of these theatres and recover the pending dues, the CAG said in its report.


First Published: Thursday, August 30, 2012 - 18:40

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