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Goel gets Dunlop reins, Lumba quits

BS Bureaux

Dunlop India, in a board meeting in Bombay on Friday, elevated president T C Goel as executive director, virtually giving him absolute control of the ailing tyre company's day-to-day operations. The company does not have a managing director since quite some time now.

At Friday's board meeting, which was attended by company chairman Manu Chhabria, the only other executive director of Dunlop, Y C Lumba, stepped down.

Manohar H Godhwani, non-executive director and son-in-law of Chhabria, also resigned from the board, sources said.

Meanwhile in Sahagunj near Calcutta, talks between the management of the company and trade unions resulted in a deadlock, with the unions insisting on payment of wage arrears before discussions and continuance of holding operations.

With workers not having been paid for several months now, the threat of the operations at the plant being shut down looms large.

Dunlop, which is awaiting approval of the draft rehabilitation scheme by the Board for Industrial and Financial Restructuring reported production for only 25 days in this calendar year on account of paucity of funds, the company said in a release Friday.

BIFR in its hearing in January 2000 indicated that Dunlop's revival could be expedited through injection of funds by promoter M R Chhabria. Chhabria said he had put in Rs 260 million and a further Rs 60 million by way of LC support for the 'holding operations'.

In 10 months thereafter, a turnover of Rs 1 billion was attained and Rs 520 million paid out as part-payment for current and arrears wages to workers.

However, further deployment of funds failed owing to delay in approval of DRS, culminating in cessation of operations.

Earlier this week, the chief executive of Dunlop had stated that delay in DRS implementation was pushing the company into terminal sickness. The current holding operations were costing the company nearly Rs 80 million every month, he added.

At the meeting with workers today, the management proposed reduction of surplus workforce, wage freeze, proportionate wage payment, redeployment of workmen and outsourcing of services. CITU and INTUC representatives on their part asked for voluntary retirement benefits to the entire workforce of 3,720 in accordance with prevailing norms.

The management was represented by Prem Sharma, senior vice-president, Shubhro Bhaduri, head-HR, and P Mitra, head-Sahagunj operations.

Dunlop had submitted a draft proposal for revival under section 17(3) to the operating agency, IDBI, in September 1999 but no decision has emerged.

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