Leather Industrial Development Corporation of Andhra Pradesh incurs huge losses

NarayanaThe Leather Industrial Development Corporation of Andhra Pradesh (LIDCAP) has hurtled into the red at an amazing speed. The corporation which was started in 1974 with a working capital of Rs 2 crore has already amassed losses of Rs 1.6 crore. And all the efforts of the corporation's recently appointed Managing Director A. Vanajakshi to set things straight has run into opposition from its Chairman G. Narayana.Matters came to a head last fortnight when at a press conference Narayana, a state MLA, levelled charges of inefficiency against Vanajakshi, and accused her of openly siding with 'corrupt' officers, penalising sincere officers and being incapable of running the corporation. But even as Narayana was making these allegations the state cabinet was meeting and reportedly decided to remove him and appoint a chairman-cum-managing director in his stead. It also decided to dissolve the entire board of the corporation.Immediate Response: Narayana's accusations also brought a swift riposte from three other MLA directors of LIDCAP, B. Rukmini Devi, G. Saidaiah and S. Pochaiah, who stood by Vanajakshi and dismissed all the allegations against her as baseless. The directors said that after taking over in April this year, Vanajakshi had brought to the notice of the board misappropriation of Rs 1.30 lakh and several irregularities in the accounts. They also called for an investigation to probe what Rs 55 lakh sanctioned last year for development programmes was spent on. They alleged that the money had not been spent on the items for which it had been sanctioned. Pochaiah charged Narayana and some officers of having evolved a purchase policy to buy raw materials to benefit themselves. "They connived and did not call a meeting of the board for several months at a time," he said, "I once resigned in disgust but Chief Minister Anjiah assured me matters would be sorted out. Even after the muddle surfaced after the new managing director came, the Government did not take any action till five directors demanded Narayana's removal and full enquiry." Narayana, when contacted by India Today declined to comment on the allegations.Pochaiah's allegations are backed by Rukmini Devi who says: "All decisions were taken without consulting the board or the Government. The irregularities should be investigated and the guilty punished if the corporation is to serve the Harijans for whom it is intended." The directors also alleged that in 1980-81 the company had sold less than the production capacity of its own mechanised units and cobblers selling to it, Despite this over Rs 40 lakh worth of footwear is said to have been bought from 14 small-scale units in the city without the knowledge of the board and without calling for tenders. Orders worth Rs 23 lakh are said to have been placed with one firm alone. They claimed that many institutions had however rejected footwear supplied by LIDCAP and said that this was because substandard leather and soles worth lakhs of rupees were purchased without calling for tenders.Shake-up Needed: Behind the flurry of charges and counter-charges is the story of a corporation which is need of a thorough shake-up. The corporation has never had a really good year, LIDCAP has a production capacity of 2,00,000 pairs of footwear. LIDCAP store;full shop window but no buyersLast year, which is said to have been the corporation's best year ever, only 77,000 pairs were produced. And even of this figure nearly half was produced by the private small-scale units. One of the first actions taken by a Vanajakshi, a tough no-nonsense administrator belonging to the state's administrative service, was to suspend all payments to the 14 small-scale units until all aspects of the original deals had been probed and the quality of the footwear supplied was checked.This brought an instant storm of protest from the affected companies which shut down immediately and which have stayed closed ever since.As Vanajakshi probed deeper several other irregularities have also come to light. They include:Plan funds totalling Rs 42 lakh meant for programmes to help charmakaras (untouchables) have been diverted as working capital;Stockpile of footwear worth Rs 30 lakh at LIDCAP's central stores;Imported processing and finishing machines costing Rs 30 lakh lying unpacked at the Common Facility Centre, Warangal for three years;Orders totalling Rs 16.23 lakh placed with small-scale units ignoring LIDCAP's capacity to produce and in the absence of any buyers;Dues totalling Rs 21.97 lakh not recovered from authorised dealers;Nearly 500 of the 691 Harijan women trained at 10 guilds at a cost of Rs 11.36 lakh not being given work;Misappropriation and cheating of about Rs 5 lakh by lidcap salesmen, other employees and authorised dealers;A questionable payment of Rs 1.20 lakh to a Madras clearing agent.Strong Opposition: Powerful forces are now at work against Vanajakshi within the corporation. There is said to be opposition to her at all levels. Narayana's attack is said to have been instigated by a group of senior officials whose activities were being hampered by her investigations. And even at a lower level one union is said to have threatened to go on strike to defeat her inquiries. The leader of a rival union S. V. Rao has denied that LIDCAP's 200 employees had any grievances against Vanajakshi. He said only some employees, involved in cases of financial irregularities, wanted to stage a strike in a bid to prevent the managing director from proceeding against them. The strike did not come off. The office of the Comptroller and Auditor General has also pointed out several lapses in the manner in which the corporation's accounts have been maintained. In spite of this it has been operating without a chief accounts officer for nearly two years.Belatedly, the Anjiah Ministry has woken up to the need to revamp the corporation. Vanajakshi is reported to have been transferred as she is facing too much opposition within the firm. Control of the corporation has also been given over to the Department of Small Scale Industries. Not everybody is agreed on the necessary steps to improve the performance of the corporation. Says Pochaiah: "Appointing a board of officials is not the answer. There should be non-official directors and a non-official chairman otherwise even what remains with the corporation may have to be wound up." LIDCAP was set up to help the untouchable churmakara community. So far the community has benefited little from it. And unless the Government's steps turn out to be effective it is unlikely that they will benefit from it in the near future.Published By: AtMigration Published On: Nov 11, 2013 12:36 IST--- ENDS ---

Download App

Get 37% off on an annual Print +Digital subscription of India Today Magazine

Leather Industrial Development Corporation of Andhra Pradesh incurs huge losses

The Leather Industrial Development Corporation of Andhra Pradesh has hurtled into the red at an amazing speed. The corporation which was started in 1974 with a working capital of Rs 2 crore has already amassed losses of Rs 1.6 crore.

PUBLICATIONS

TELEVISION

EVENTS

RADIO

GAMING

USEFUL LINKS

PRINTING

WELFARE

DISTRIBUTION

SYNDICATIONS

WEBSITES

EDUCATION