The bumpy ride of Dunlop India will come to an end if the last week's Calcutta High Court order to wind up the company finally stands. The beleaguered tyre-maker has got time till Friday as a Division Bench today asked the company to deposit Rs 10 crore before it considers a stay on the winding up. Pawan Kumar Ruia
, chairman of the Kolkata-based Ruia group, which owns a controlling stake in the company, tells Probal Basak
his side of the story. Excerpts:
Your decision to acquire Dunlop in 2005 generated a lot of hope. But in reality, you never came close to reviving the company. What went wrong?
Even if the company goes for winding up, somebody will certainly buy the plant, manufacture and sell tyres. So where is the end of road? Today there is a different form of taking over a company. Sometimes you can take (over) a company by transfer of shares and sometimes by way of asset sale. But I will exercise all my right to save the company from winding up.
Why do you think there was a situation that led the court to order winding up?
There can be a situation where the creditors may go to court for winding up. It is within the right of the court to pass a winding up order. But the question is what is the liability of the company that is going for winding up. Some are saying and even there are reports that the liability is Rs 1,000 crore. I think court order notes it at Rs 14.28 crore.
One thing that went wrong was that the company is highly sensitive to the media and the politicians. When there is so much media hype and political interference in a company, it becomes difficult to run the company as people start taking advantage of the situation.
Also, there is a section workers who never wanted the plant to run. It went wrong from 2008, when the plant was closed for the first time. It closed because a section of workers did not agree to certain things. They were only 22 in number. Because of that, the livelihood of 1,000 workers were affected. Had the closure not happened then, Dunlop would have been a different story altogether. Unfortunately, we could not control those 22 people.
Was there any mistake on your part as a promoter, which you regret now?
I think nobody else can do a better job than what I have done. No one would have spent that kind of time, money and energy that we have put in.
I took up a job which people thought was impossible. Workers in 2005 made me a hero because I took up the impossible job. Just because it has not been successful yet, you cannot blame someone who took the challenge. There has been no lack of intention on the part of the promoter.
How confident are you of saving Dunlop?
I think, the court order says the liability is Rs 14.28 crore from the petitioning creditors. But we are contesting the claim. We do not think this much amount is payable. I do not know whether it would be fair to wind up a company like Dunlop India to settle a claim of Rs 14.28 crore. We inherited all these liabilities, when we took over from Chhabrias.
Many of the so-called workers who supported the winding up were not even our employees. In such a situation, where we re contesting the claim of the creditors, I hope there will be no winding up.
HC says the management treated Dunlop as a cash cow. It estimates the company fraudulently sold assets worth Rs 2,300 crore. Your views?
If the worth of the company was so much, Chhabrias would not have sold the company. It has been the case with Dunlop from day one. Chhabrias were accused of taking away the money. To me, no one can say I took away the money. Because plants were not running, and there was no cash flow. Everyone knows I have been paying the workers’ bill, electricity bill for a closed plant.
Can you share the details of the four properties, which the court observed were transferred to your group companies by depressing the actual value?
Whatever be the four properties, my question is how the Rs 2,300 crore is estimated? No bank wanted to support the company since the beginning. They did not want to lend money. That is why we had to do so much restructuring to get money for the company. All these properties were transferred to an SPV (special purpose vehicle), which is held by the holding company of Dunlop. The properties still exist and have not been sold off. Those were mortgaged to banks to get money and that money came into Dunlop.
One criticism is that while Dunlop needed fresh investment, Ruia group was busy acquiring companies in Europe...
When we took over the company, it had a liability of some Rs 800-900 crore. The total liability should not be more than Rs 50 crore now, if we account for the dues to the West Bengal government and workers. I have infused Rs 500-600 crore in the company. I have paid salary to all workers from 2006 to 2011, which costs about Rs 5 crore a month.
There were reports that you initiated the process to transfer the trademarks of Dunlop India to a group company. What the liquidation of Dunlop, if it happens, means for your other group companies given that Falcon too sells tyres under the Dunlop brand?
I do not want to comment on the brand. I can only say the order will have no adverse impact on other group companies.