The recommendation was made by the committee, comprising independent chartered accountants, based on results of field studies and due-diligence audits. [break]The committee has also suggested that the government provide different financial and non-financial facilities to the four firms, namely Birat Leather, Birat Shoes, Shree Nepal Boarders and Basulingi Private Limited.
"The technical committee has recommended that the ministry declare the four firms as sick," Bishnu Dhakal, an MoI undersecretary, confirmed to Republica. "The ministry will now have to submit the recommendation proposal to the Cabinet for approval."
According to Dhakal, the technical committee has suggested that the government offer refinancing facilities to the firms and waive interest on the loans. "But this work falls in the jurisdiction of Nepal Rastra Bank," an MoI official said. "Let´s see how it responds."
Thirty-seven different firms have so far filed applications at the ministry to get the status of sick industry after the government announced a program to revive sick industries around one and half years ago.
The technical committee, assigned to indentify external and internal factors that caused deterioration of their financial health, is trying to verify the actual status of the firms that have filed applications, Dhakal informed.
"The government will extend necessary support to the firms in case external factors such as political instability and power shortage, among others, contributed to their lagging performance," Dhakal said. "But they won´t be entitled to government support if causes of their failure were management inefficiency and other internal reasons."
Earlier, the ministry had recommended that two firms be declared sick and forwarded proposals on them to the Cabinet. The Cabinet, however, returned the proposals back to the ministry, asking it to to lay suggestions on facilities that the state could offer.
The government had earlier announced to provide relief package to sick-industries through its Immediate Relief Program 2011/12. The MoI was assigned to identify actual number of sick industries upon submission of a report in 2011 by the Sick-industries Rehabilitation High Level Task Force (SITHLTF) that laid emphasis on revival of sick industries.
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