NPPCLWU demands signing of MoU before proceeding
Nagaland’s first ever medium industry set up in 1971– Nagaland Pulp and Paper Company Ltd.(NPPCL)- has been taken over by a Mumbai-based entity called 3 A Capital Services Limited (3ACSL), after the latter purchased shares worth Rs.1,13,62,231 of Rs.100 each sometime in November 2023.
After the purchase of shares by 3ACSL, the state government which had 12% share is now left with only 3.51% minority share. The sale of shares of the NPPC Ltd to 3ACSL has come as a surprise especially since the firm is described primarily as an investment company that buys shares of all unquoted, unlisted, delisted, suspended, illiquid companies and all types of transferable bonds, including government and PSU bonds.
The “new owner’ will have to invest more Rs.1000 crore to purchase new machineries for its revival and also solve the perennial problem of acute power shortage to run the mill and address the pending dues owed to former mill workers since 2017.
It may be noted that Tuli Paper mill perched atop a vast expanse and measuring around 700 acres was leased by the landowners for a 99-year period.
Former mill workers are running from pillar to post to get their dues but have found themselves left on the lurch.
NPPCL Workers’ Union (NPPCLWU) president and Joint Action Committee (JAC) president A Kika Lenda told Nagaland Post that the union has raised the issue of salaries owed to them since 2017 and for which two meetings were held- March 8 at Kohima and March 12 at Dimapur- with the new owner and state government representatives but with no breakthrough.
He disclosed that 3ACSL had constituted a new NPPCL board with five board members.
Lenda claimed that 3 ACSL after taking over the paper mill agreed in February this year to clear all the workers’ outstanding dues, and also invest money to revive the mill.
However, he said these assurances without signing a MoU pertaining to release of pending dues and revival of the mill cannot proceed since it lacked written legal guarantee.
Despite knowing the plight of the erstwhile mill workers, Lenda said the state government was trying to keep a low profile and not taking up their case with the new owner.
NPPCL Workers Union, in February this year, decided to pursue legal action in order to obtain outstanding salary and pension payments. Despite multiple attempts made since August 2017, the union said they were unable to secure these payments.
NPPC Ltd. or Tuli Paper Mill is described as a peace package after the signing of the first cease fire on September 6, 1964 with a share equity of 7:1 between the government of India and the state government respectively.
NPPCL was the state’s only major industry established on September 14, 1971 as a joint venture among the Government of Nagaland, Hindustan Paper Corporation Ltd (HPCL), and the Government of India (GoI).
The mill began production in 1982 but was bedevilled by faulty and second hand boilers and lack of power. It stopped production in 1992 and was about to be declared a sick industry when it went under the Board for Industrial and Financial Reconstruction (BIFR) and for which a capital outlay of Rs 552.44 crores was approved in 2006 during the UPA government.
The Tata Consultancy Service was appointed to oversee the revival. However, due to cost escalation, the revised estimate for revival of Tuli Paper Mill had shot up to Rs. 1242 crore that included purchase of machineries since the existing ones became obsolete and in total disrepair.
BIFR was dissolved in November 2016 by the Modi government which referred proceedings to the National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT).