Dunlop India yesterday said that the delay in implementation of its draft rehabilitation scheme was pushing the ailing tyre maker on the brink of closure and has put its revival process in trouble.
In a presentation to the board of directors, Dunlop India president T C Goel said a monthly loss of about Rs 8 crore was incurred due to its current holding operations.
Dunlop faced several constraints due to lack of working capital in the mid-1990s. It was unable to operate at the break-even level.
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As a result, its turnover declined and the company started incurring losses and finally became a sick industrial company in June 1998, according to a release from Dunlop India.
A draft proposal for revival of the company was submitted by Dunlop India to the operating agency, the Industrial Development Bank of India (IDBI) in September 1999, but progress on this front has been taking place at a snail's pace, the company said.
"The Board for Industrial and Financial Reconstruction (BIFR) does not seem to appreciate the grim situation prevailing at the company, despite the advice of the Appellate Authority of the Industrial and Financial Reconstruction (AAIFR) to hasten the process of rehabilitation," according to the company.
As per BIFR's indication in January 2000, Dunlop promoter M R Chhabria invested Rs 26 crore and a further Rs 6 crore by way of LC support to set in motion the holding operations.
The manufacturing operations at its plants in West Bengal and Tamil Nadu were suspended in February 1999. The livelihood of 6,200 strong workforce depends on the company.
The board also approved the relocation of offices at Dunlop House, Calcutta to Sahagunj factory premises as an austerity measure.