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Sabotage feared in Dunlop fire, revival jeopardised
Friday, 14 March 2003, 20:30 IST
KOLKATA: A fire that destroyed the office here of Dunlop, Asia's oldest tyre company, has put the ailing firm's revival plans in jeopardy.
Dunlop workers expressed the apprehension that Thursday's fire in the four-storeyed building may not be accidental and needed to be probed.
"Dunlop's revival plans have received a setback," Aniruddha Sengupta, secretary of Dunlop India Limited Employees' Federation, told IANS, insisting that the fire was not an accident.
Police have refused to comment, only saying that an investigation was on.
The gutted property, valued at about 
100 million, was to be sold to raise funds for the revival of the company that has suspended operations primarily because of lack of running capital.
The office on Free School Street was among several other Dunlop properties that the management intended to put up for sale. The blaze was so devastating that a portion of the 60-year-old building collapsed and the civic authorities are unwilling to take a chance and want to bring the whole mansion down.
The Dunlop management has said the fire would not impact the revival plans. But the workers are not assured by the fact that the building was insured.
The accident comes at a time when the Dunlop management was offering a new package to reopen its production facility here.
The management said the Sahagunj unit could reopen if the employees agreed to take a 20 percent cut in pay and a three-year freeze on salary.
The management's proposals also included phased payment of salary backlog, closing down of non-profitable sections and a voluntary retirement scheme for a section of the workforce. But the offer had not gone down well with the unions.
Production remains suspended in Dunlop's two factories in Sahagunj and Ambattur since August 2000. The units reopened in August 2000 after 25 months of suspension of work since 1998 following a 200 million-revival package put together by the management. However, because of lack of working capital, production was stopped again.
The future of Dunlop plunged into uncertainty after majority stakeholder Manu Chhabria died in April last. His widow Vidya Manohar Chhabria has now taken over. The Chhabrias hold 44 percent shares in Dunlop through the Dubai-based Jumbo Group.
Dunlop was first referred to the Board for Industrial and Financial Reconstruction (BIFR) in 1998.
Manu Chhabria had then appealed to the Appellate Authority for Industrial and Financial Reconstruction (AAIFR) to convert into equity his part of investment -- 260 million.
AAIFR had said the conversion of the amount into equity should be based on calculations according to Securities and Exchange Board of India (SEBI) guidelines keeping December 31, 2001, as the reference date subject to a minimum of 10 per share of the face value of 10.
The company had submitted an independent share valuation report to AAIFR pegging the share's intrinsic value at 10.29. In that case Chhabria's shareholding would have exceeded 70 percent. On the other hand, Dunlop's operating agency, the Industrial Development Bank of India (IDBI) suggested a share value of 47.
AAIFR has said banks and debenture holders will have the right to convert an equivalent amount -- 260 million -- pro-rata from out of their dues (excluding penal interest and liquidated damages) into the equity of Dunlop at the same rate at which the contribution of promoter and associate would be converted.
Source: IANS
100 million, was to be sold to raise funds for the revival of the company that has suspended operations primarily because of lack of running capital.
The office on Free School Street was among several other Dunlop properties that the management intended to put up for sale. The blaze was so devastating that a portion of the 60-year-old building collapsed and the civic authorities are unwilling to take a chance and want to bring the whole mansion down.
The Dunlop management has said the fire would not impact the revival plans. But the workers are not assured by the fact that the building was insured.
The accident comes at a time when the Dunlop management was offering a new package to reopen its production facility here.
The management said the Sahagunj unit could reopen if the employees agreed to take a 20 percent cut in pay and a three-year freeze on salary.
The management's proposals also included phased payment of salary backlog, closing down of non-profitable sections and a voluntary retirement scheme for a section of the workforce. But the offer had not gone down well with the unions.
Production remains suspended in Dunlop's two factories in Sahagunj and Ambattur since August 2000. The units reopened in August 2000 after 25 months of suspension of work since 1998 following a 200 million-revival package put together by the management. However, because of lack of working capital, production was stopped again.
The future of Dunlop plunged into uncertainty after majority stakeholder Manu Chhabria died in April last. His widow Vidya Manohar Chhabria has now taken over. The Chhabrias hold 44 percent shares in Dunlop through the Dubai-based Jumbo Group.
Dunlop was first referred to the Board for Industrial and Financial Reconstruction (BIFR) in 1998.
Manu Chhabria had then appealed to the Appellate Authority for Industrial and Financial Reconstruction (AAIFR) to convert into equity his part of investment -- 260 million.
AAIFR had said the conversion of the amount into equity should be based on calculations according to Securities and Exchange Board of India (SEBI) guidelines keeping December 31, 2001, as the reference date subject to a minimum of 10 per share of the face value of 10.
The company had submitted an independent share valuation report to AAIFR pegging the share's intrinsic value at 10.29. In that case Chhabria's shareholding would have exceeded 70 percent. On the other hand, Dunlop's operating agency, the Industrial Development Bank of India (IDBI) suggested a share value of 47.
AAIFR has said banks and debenture holders will have the right to convert an equivalent amount -- 260 million -- pro-rata from out of their dues (excluding penal interest and liquidated damages) into the equity of Dunlop at the same rate at which the contribution of promoter and associate would be converted.
Source: IANS