Date:10/08/2006 URL: http://www.thehindu.com/2006/08/10/stories/2006081023940400.htm

Kerala

Seafood exporters' forum seeks one-time settlement

Staff Reporter

KOCHI : The Forum for Revival and Reconstruction of Seafood Export Industries in India has made representations to the Union Government seeking a one-time settlement of loans similar to the settlement reached with deep-sea fishing units in 1997.

The forum members are in New Delhi to meet the Union Finance and Commerce Ministers to impress upon them that the one-time settlement proposal given by their bankers recently was not going to help the sick units.

The forum members are being accompanied by some of the MPs from Kerala, Tamil Nadu, Andhra Pradesh and Maharashtra.

The sick seafood units are seeking a one-time settlement that will involve quantum of money lower that what has been recommended. They have cited several reasons, including that unlike in the case of the deep-sea fishing industry, their export credits had been covered by ECGC Insurance that provided relief to the bankers.

The Export Credit Guarantee Corporation claim amounts must be credited to the loan accounts since export credits are covered by the insurance whereby the bankers get up to 66 per cent of the principal amount, said a spokesman of the forum.

There are more than 150 sick seafood units in the country. Of them, 60 are in Kerala. The sick units owe their bankers around Rs.500 crores.

A committee headed by the Chairman of Marine Products Export Development Authority (MPEDA) had submitted its report for a one-time settlement. Following this the banking division of the Union Finance Ministry had met on July 13 to consider the report.

The banking division directed the sick seafood units seeking settlements to submit their proposals to their bankers by September. According to the directives, the bankers are expected to take a decision by the end of December this year.

The forum spokesman said that though the committee was headed by the MPEDA chairman, it comprised mostly of bankers and that the plight of the sick units was not considered sympathetically.

He said the committee recommended waiving the interest and limiting the liability to the realisable value of the securities. This is even otherwise available under normal one-time settlements (OTS) offered by banks, he claimed.

At the same time, he said, no specific quantitative relief was recommended while it was left to the individual bankers and sick seafood units to arrive at the settlement.

The committee report pointed to exporters having suffered huge losses due to factors beyond their control. However, several issues remained unaddressed, said the spokesman for the forum.

Issues like the reason why more than 60 per cent of the exporters failed were not studied. Nor was the justifiability of the relief demanded by the units analysed, he added.