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KOLKATA, Dec. 23

THE operations at Dunlop India Ltd's (DIL) two factories - one at Ambattur in Tamil Nadu and the other at Sahaganj in West Bengal - are expected to recommence soon with the employees' unions at both the places and the management agreeing in principle to make unusual sacrifices to help the company reduce the cost of operations.

Indicating this to ordinary shareholders at the company's 75th annual general meeting here on Monday, Mr P. Balakrishnan, Executive Director of DIL, said the management was now awaiting funds to come to recommence operations, first at Ambattur and then at Sahaganj.

Mr Balakrishnan, who chaired today's AGM, said that the Appellate Authority for Industrial and Financial Reconstruction (AAIFR) had recently concluded hearing on the detailed rehabilitation scheme (DRS) which was submitted by the management in May.

A favourable order from AAIFR was expected any time, empowering the management to dispose of the company's idle assets worth about Rs 116 crore.

The funds to be raised from selling non-performing assets (NPAs) would be utilised as working capital, to clear a portion of debt and arrears of the employees. Principal amount of fixed deposits would be paid in two years without interest, while all bank loans would be cleared during the next five years.

Claiming that the efforts put by the management during the last 12 months had started giving positive results, Mr Balakrishnan said that both the West Bengal and Tamil Nadu governments had also played a proactive role for creating a conducive situation whereby all stakeholders of the company had been able to arrive at finalising the DRS acceptable by all.

He, however, said that due to adverse industrial relations situation at the company's earlier head office at `Dunlop House' here, important documents pertaining to subjects such as provident fund, gratuity, share transfer, fixed deposit, sales tax, income tax and Central excise, were not accessible to the management.

As a result, those documents could not be furnished to auditors and the management was also defaulting in complying with different statutory requirements. It may be noted that DIL's head office has since been shifted to `King's Court' on Chowringhee Road.

Mr Balakrishnan said that DIL had become a subsidiary of Gordon Woodroffe Ltd (also a Jumbo group outfit) with effect from January with the conversion DIL's Rs 26-crore loan into equity. The said loan was taken by the company from Gordon Woodroffe, to begin "holding operation'' at both the factories over two years ago. The loan had now been converted into equity based on the formula/calculation for pricing according to SEBI guidelines subject to face value of a minimum Rs10 per equity share with effect from January.

With the conversion of the loan into equity, DIL's paid-up equity capital had been increased from Rs 18.99 crore to Rs 44.99 crore and the company had become a subsidiary of Gordon Woodroffe with a total holding of 2,60,00,00 equity shares equivalent to 57.79 per cent of the total paid-up equity capital of the company.

He said that the Jumbo group of the late M.R. Chhabria now holds 76.48 per cent of the total paid-up equity capital of DIL, leaving FIs to jointly hold 14.10 per cent and others (including corporate bodies, non-resident and Indian public) 9.42 per cent ordinary shares.

It was stated that AAIFR had recently replaced IDBI as DIL's operating agency (OA) for finalising DRS. In its place, State Bank of India had been appointed as OA.

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