The Telegraph
Wednesday , February 6 , 2013
Since 1st March, 1999
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Ruia contests claims, vows to turn around Dunlop

Calcutta, Feb. 5: Pawan K. Ruia, promoter of Dunlop India Ltd, claims the company does not owe more than Rs 14.28 crore to its creditors and denies stripping off Rs 2,300 crore worth of property as he gears up to face the biggest challenge of his chequered corporate career.

Speaking to The Telegraph a day before his lawyers were to seek a stay on the winding up order by a single bench of Calcutta High Court, Ruia vowed to steer the ailing tyre maker out of troubled waters and reopen the plants even as several such attempts had failed in the past.

Apart from creditors’ demand, the judgment of Justice Sanjib Banerjee on January 31 had mentioned two other prominent parties whom Dunlop owed money — workers and the Bengal government.

Employees had claimed Dunlop owed them a principal amount in excess of Rs 74 crore, while the demands of the state government, including tax and electricity dues, also added up to around Rs 74 crore.

However, neither the government nor the employees had filed winding up petitions though they did not contest it either when the judgment was passed.

“The claim from the creditors would not be more than Rs 6-7 crore. The claim of the workers will not be more than Rs 10 crore, while the same for the government should not even cross Rs 15 crore,” Ruia said.

He said the Ruia group was in discussion with seven creditors listed in the judgment and would settle their claims shortly.

“I do not know whether it was fair to wind up a company like Dunlop India just to settle a claim of Rs 14.28 crore,” he wondered.

He argued that several workers mentioned in the affidavit filed during the case were not employees.

“Many of them had never been our employees,” Ruia said.

Sources said the Ambattur union was likely to file an affidavit tomorrow before the division bench which would hear the stay order plea opposing the winding up decision.

Property dispute

The single bench judge had emphasised two issues before passing the order to appoint an official liquidator to take charge of the assets of Dunlop, sell them and pay off the creditors. Justice Banerjee had noted that despite several reminders, no credible plan of revival was offered by the company.

The second issue raised by the judge was the way Ruia sold off assets worth Rs 2,300 crore.

“The conduct of those in the management of the company in fraudulently selling assets conservatively estimated at Rs 2,300 crore makes it just and equitable for the company to be wound up,” the judgment read.

Ruia argued that the valuation of four properties: Ambattur land in Chennai, Sahagunj land at Hooghly, a Goa property and Bombay House in Worli would not be more than Rs 600 crore.

“The properties are still with the Ruia group holding company which is also the holding company of Dunlop. A corporate structure was created to hive off these properties into separate companies in order to take loans,” he claimed.

Ruia also said a plan was pending with the labour commissioner of Bengal for re-opening the Sahagunj plant.