Amid the winding-up order for Dunlop India, its erstwhile promoter, Manohar Rajaram Chhabria, or Manu Chhabria as he was popularly known, has left behind a legacy of hits and misses.
Much before Pawan Ruia bought Dunlop in 2005 from the Chhabria-controlled Jumbo group, Manu Chhabria had fought many a battle to gain control of the tyremaker.
Perhaps the most famous was with the R P Goenka.
Although the duo acquired control of Dunlop jointly in 1984, they fell out. Soon after the transaction, Chhabria slipped into the role of chairman and R P Goenka’s younger scion, Sanjiv Goenka, became the deputy managing director. The conflict that emerged subsequently was over who would run the show at Dunlop.
Many still recall the acrimonious board meetings that were allegedly a first-time concept for Chhabria, who started his innings as a radio parts trader from Mumbai’s Lamington Road.
Despite the fact that Dunlop India was doing well operationally, the going had become difficult and embarrassing for Goenkas in Dunlop.
“Operationally, Dunlop was on the mend. In 1984, the Indian tyre industry was in the doldrums and so was Dunlop India. Its sales then were an impressive Rs 2.95 billion (Rs 295 crore) but profits had dwindled to twenty million or so. When other Indian tyre companies started doing well, Dunlop did better. By 1988, sales were Rs 5.23 billion (Rs 523 crore); the bottom line, a healthy Rs 942.4 million (Rs 94.24 crore),” Gita Piramal wrote in Business Maharajas.
Yet, Goenka decided to call it quits. An auction was held and Chhabria was the highest bidder. But he paid much more than what had to for buying the stake in 1984.
The wheels of fortune, however, appear to have turned for the tyremaker yet again. And judge Sanjib Banerjee, who delivered the winding up order on Thursday, didn’t miss it.
“The wheel appears to have turned full circle for this industrial giant,” reads the opening lines of Banerjee’s order.
Not just Goenka, there were other fights too that Chhabria faced with the Dunlop management. Along the same time, in the late 1990s, there was a revolt in Shaw Wallace management, the other marquee brand from the Manu Chhabria stable acquired in a hostile bid.
It came to such a pass that in December 1996, the unions at Dunlop and Shaw Wallace made a joint representation to the finance minister and the Prime Minister’s Office, seeking the removal of Chhabria.
For Shaw Wallace, Manu Chhabria had not one opponent in the management, but two: Vijay Mallya and Kishore Chhabria, his brother. The spat with Mallya was over the control of Shaw Wallace, which had to be handed over to the former after the acquisition, which didn’t happen.
The public battle with Mallya finally ended with the UB group acquiring Shaw Wallace for Rs 1,300 crore, three years after Manu Chhabria’s death. In 2007, Shaw Wallace & Co. was merged with the UB group, but its brands, Royal Challenge (premium whiskey) and Antiquity (super premium whiskey) are alive and kicking.
The other Manu Chhabria company that was acquired by Pawan Ruia, Falcon Tyres, is recovering after a bad year. Last year, Falcon had posted a net loss of Rs 59 crore on a turnover of Rs 905 crore. In the last quarter of the current financial year, the company made a profit of Rs 2.5 crore. Falcon, incidentally, markets tyres under the Dunlop and Falcon brands, and has a market share of 2.6 per cent.
For Manu Chhabria, who had built a $1.5 billion empire, it’s a mixed bag for businesses that were once his.