Creditors turn the heat on Kunwar Ajay

Hundreds of creditors today assembled at the corporate headquarters of the city-based sari major Kunwar Ajay to protest against the company's failure in settling their bills.

Kunwar Ajay has been grappling with severe fund problems for the past few months.

Interestingly, it was Kunwar Ajay chief executive officer Suresh Agarwal who had called these creditors - local sari manufacturers and yarn traders for settlement of the bills.

However, as the creditors came to know that Agarwal was not around, they started slogan shouting against the company. The headquarters on Ring Road and raised slogans against Kunwar Ajay in protest

Many cheques issued by the company in the past one year have bounced.

Kiranbhai Patel, a local yarn dealer, had supplied yarn worth Rs 1.5 lakh to the company. On October 30, a cheque of Rs 56,000 was issued as part payment to Patel. However, the cheque bounced.

An angry Kiranbhai said, "I have been trying to contact Agarwal but he is just not available. Today he had called this meeting but now he seems to have escaped."

Same is the story of Mithalal Jain, another creditor who has supplied saris worth over Rs 10 lakh to Kunwar Ajay and is awaiting payment since the past six months.

"The cheques issued by Kunwar Ajay have bounced and now they are trying to defend themselves. But we have to get our dues," Jain said.

It was on Thursday that the company issued advertisements in the newspapers stating that the company in the name of firms, which had not supplied any material, had issued some cheques.

The advertisement requested genuine creditors to submit original bills and challan copies for clearing the payments.

However, the creditors did not appeared to be amused with this age-old tactic adopted by many firms in Surat.

"We are not at all concerned with the fake creditors as claimed by the company. We want our bills to be settled or else we will be left with no option but to lodge a complaint with the police," says Anukul Chaugule, a creditor who supplied saris worth Rs 1.25 lakh in January this year and is still awaiting his payment.

Agarwal defended his company saying that while the financial position of Kunwar Ajay was not good in the past three-four months, it did not in any way indicate that the group had gone bankrupt.

"Our financial position is tight. But we have not gone bankrupt," he stated.

Referring to the notice in newspapers, Agarwal said the notice was issued after the company came to know that some of the traders had submitted fake bills in connivance with the Kunwar Ajay staff.

"We have made payment for these fake bills. Now we are asking genuine creditors to present the proof that they have really supplied goods," he said.

Controversies involving payment are not new for the cash-strapped Kunwar Ajay group which had launched a high profile advertisement campaign on private TV networks.

The campaign ran into trouble after the company failed to clear its advertisement dues with TV networks, forcing several TV networks to approach the court of law.

Two months back, the company had diversified into real estate and had launched a project of setting up farmhouses on the Surat-Dumas Road.

However, the company which had issued huge advertisements on the front pages of local newspapers, had to beat a hasty retreat after a local farmer issued a legal notice stating that the said land did not belong to Kunwar Ajay but was his property.

Suresh Agarwal, who has a stable full of cars including a Mercedes, is also known to be politically well connected.

The blue coloured E-class Mercedes of Kunwar Ajay is well known in Surat as the car is used extensively by political leaders coming to Surat.