Dunlop is Dunlop,” but is scarcely ahead anymore. That is the bitter impression the Parliamentary Standing Committee on Commerce that on Monday visited the Hooghly Sahaganj factory of Asia’s oldest tyre manufacturing company tended to gather, thanks to an utterly insincere and slapdash approach shown by the Ruia Group, the promoters of the company, towards rejuvenating the sick unit.
Intrigued by how a factory with zero production and no revenue transaction could continue trading in shares in the capital market, the committee led by BJP MP Chandan Mitra, was likely to seek a clarification from the SEBI on the matter.
As the Ruia Group, the current promoters of Dunlop owned a host of other companies, inside trading in the share market was not being ruled out Mitra said wondering as to how the shares of a unit that had not earned profits for the last one year could go up.
The profit of the group had come down from Rs 170 crore to around Rs 20 crore, sources said. The committee was in the process of studying the potential of India’s rubber industry and would also visit Tripura, Kerala and Tamil Nadu. Insofar as Dunlop’s Sahaganj factory was concerned Mitra said: “We are trying to understand why the factory here went off track when the tyre industry is growing generally.”
“There has been no production from 2010 and there has been a general deterioration despite the fact that rubber is a labour-intensive industry and can work as the basis of an area’s economic development” the BJP’s Rajya Sabha MP said. However, he dispelled the misapprehension that the team had come to facilitate the takeover of the sick unit.
“To facilitate a takeover is neither within our power nor our brief,” Mitra said, adding however that the committee had recommendatory powers and “would recommend a number of alternatives to help the factory revive or at least see that something else like a food processing unit or an IT park can come up here” Mitra, who fought the last lok Sabha elections from the area said.
Amazed at the management’s demands for Rs 560 crore, out of which Rs 250 crore was for a captive power plant for rejuvenation of the factory, the members reportedly wondered as to how power could be a problem in a power-surplus State like Bengal. “How are the factories functioning in other parts of the country,” Mitra wondered.
The all-party, nine-member committee that met both the management and leaders of three labour unions were reportedly told by the latter that the workers had not been given their PF and gratuity. “These promoters have no credibility. Even the sweet vendors would not give them anything in credit, let alone the banks” complained a union leader.
Throwing out the argument of the management that goons were stealing expensive machine parts from the closed units and that repeated complaints to the police had yielded no results, the leader said: “It is the other way round. Many machine parts are either being stolen with the active connivance of the owners or they are being removed for use in the other plants owned by the group.”
Dunlop a 75-year-old company ran into rough weather in the mid-90s and was purchased by the Ruia Group from the Chabarias in 2005. The Dunlop complex is spread over an area of about 189 acres, out of which the factory occupies about 56 acres. “We had come to explore ways to revive the factory but it seems that the intention of the promoter to start it all over again is suspect. Though I don’t have evidence, it seems that they are sitting on the vast stretch of the prime land flanked by the Ganga and GT Road for other motives.
Dunlop’s Sahaganj unit had the rare distinction of making aero tyres and it had also supplied tyres for Bofors guns during the Kargil War. Even as tremendous euphoria was generated among the locals who had gathered around, the plant people rued how Hooghly district once called Bengal’s Ruhr had become an “industrial desert” after the closure of two industrial giants Dunlop and Hind Motors. A third, in the shape of Tata Motors in the same district was not allowed to come up, they complained.