Mumbai: Five cooperative sugar factories linked to Mahayuti stand to benefit from a cabinet decision which waived tough conditions on govt guarantees for loans worth Rs 631.6 crore from the apex Maharashtra State Cooperative Bank.
These include Chhatrapati factory linked to NCP MLA Datta Bharne, a close aide of deputy CM Ajit Pawar, which received a guarantee of Rs 128 cr, and Bhaurao Chavan factory in Nanded linked to BJP MP Ashok Chavan which received a guarantee of Rs 147.8 crore.

As per the cabinet decision, board of directors will not face property attachment over loan repayment. The cooperative sugar factories had been granted the guarantees for term loans on October 23, 2023, based on a stringent policy formulated by the state on Sept 13, 2023. The policy said that directors of sugar factories would be personally liable to repay the loan and their properties could be attached to recover it. It also said that if the factory had a previous loan, then an NOC would be needed from the lender before a state guarantee could be extended for an MSC Bank loan. If the directors changed after disqualification or death, the condition of personal liability and property attachment would be enforced within 10 days on the new directors. In the case of a change in directors after elections, the period would be 30 days.
At a meeting on Aug 25, the state cabinet had dropped the property attachment and the NOC requirements and had agreed to a less stringent policy for granting guarantees to factories getting MSC Bank loans. Under the new policy, while the board of directors will remain personally liable for the loan, they will not face property attachment but will merely have to submit a bond regarding their personal liability for loan repayment.