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High court orders Dunlop liquidation
The high court in Kolkata has ordered winding up of the Pawan Ruia group's tyre maker, Dunlop India.
Judge Sanjib Banerjee has directed the official liquidator to take possession of all the company's assets and books of records.
The petition seeking liquidation was launched by a Kerala-based partnership, E V Mathai and Sons. Later, 15 other creditors joined the plea.
They said they together were owed about Rs 1,000 crore (Rs 10 billion). Most of these used to supply rubber to Dunlop.
"We are yet to receive the court order. We'll decide on the next course of action after getting our counsels' advice on the issue," the Dumlop spokesperson said.
The company's representative in the court sought a stay on the order but the judge refused.
On March 26 last year, a bench of the court had ordered appointment of a provisional liquidator for protecting the assets, following an application from a company, Madura Coats, on non-payment of Rs 2 crore (Rs 20 million).
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High court orders Dunlop liquidation
Until 2010, Dunlop used to enjoy protection from its unsecured creditors under a state law, the West Bengal Relief Undertakings (Special Provisions) Act.
The status was eventually withdrawn by the erstwhile Left Front government and the successor government also did not renew it.
Operations at both factories, at Sahagunj (West Bengal) and Ambattur (Tamil Nadu), have been suspended for many months.
The state government had earlier opposed appointment of a provisional liquidator but today it welcomed the decision in the court. Representing the state, Advocate General Anindya Mitra said the order would faciliate revival of the plants.
Sepaately, the government said it would consider takeover. "We are taking all legal views. But we would like to take over the Sahagunj plant. If there is any auction process subsuquent to today's order, the state government may take part," state labour minister Purnendu Bose told Business Standard.
He said the West Bengal Industrial Development Corporation, its industry promotion arm, might take part in an auction.
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High court orders Dunlop liquidation
Dunlop's Journey Under Pawan Ruia
Nov, 2005: Pawan Kumar Ruia's acquisition of Dunlop from Jumbo Group
Aug, 2006: Ambattur plant (near Chennai) reopened
Oct, 2006: Sahagunj plant reopened
July, 2007: Ruia took Dunlop out of the purview of the BIFR
March 2008: Sahagunj plant closure as West Bengal State Electricity Distribution Company stops supply. Reopens after few months
Jan 2010: Shares of Dunlop India re-listed on BSE
Apr, 2011: Suspension of work notice by the management on law and order and labour issues. Lifted after two days
Apr, 2011: Company informs bourses Ruia stepped down as chairman on January 31
Aug 10, 2011: Ruia quits board
Oct 2011: Stop-work notice in Sahagunj plant
Feb, 2012: Suspension of work at Ambattur
March, 2012: Court orders appointment of a provisional liquidator for protecting assets after application by Madura Coats
