Workers of JK Cotton yesterday stormed into the annual general meeting of JK Synthetics, forcing the company chairman, Gaur Hari Singhania, to leave the meeting site. A large number of shareholders and workers from the Kota unit, were unable to enter the Merchants Chamber Hall, the site of the AGM, since the approach gallery was blocked by the agitating workers.
In the absence of Gaur Hari Singhania, the vice chairman and managing director, Govind Hari, presided over the meeting. The AGM was concluded in ten mintures after passing some resolutions. The auditors report too was not fully read.
The chairmans speech did not contain any policy or initiative the company planned to adopt. The speech merely noted that the competition which the domestic man-made fibre industry was subjected due to liberal imports, had crippled producers with small capacities and only manufactures with large capacities could face the competition.
JK Synthetics, suffering from a lack of working capital, since FIs are not prepared to lend it funds, was compelled to shut down its acrylic and tyre cord units. The grey cement plant, which earlier fared well, was now facing competition due to creation of fresh capacity in the northern region. Only the white cement division put up a creditable performance.
Although the government decided to impose anti-dumping duty on the acrylic imports, JK Synthetics was unable to take advantage of the situation, since both its plants are lying closed.
According to the company, its white cement unit too has come under pressure of late.
The companys efforts to sell off its Kota and the Jhalawar complexes too resulted in a naught. DSP Merrill Lynch had been given the mandate to work out a viable proposal for the sale of the units.
On the ICICI loan recall, the speech noted these have been replied to and financial institution had stated they were prepared to consider any proposal of the company which is backed up by a firm tie up for sale of any productive assets.
While the management has admitted its failure to revive the company, workers at the Kota unit said they have formed a JK Karamchari Rozgar Suraksha Manch, consisting of all grades of employees.
The co-operative is being supported by a forum of business men, organised under the banner of Industrial Dealers Association (IDA).
Anil Nyati, secretary, IDA, said although the company owed the association Rs 10 crore, it would not press the workers co-operative for immediate payment, if and when it takes over the mills. We shall extend a months credit to restart work. We are confident that the mills can be run profitably, he said.
Y K Gupta a member of the working committee of the Rozgar Suraksha Manch said the workers were prepared to run the mills. At least three branches, i.e., the nylon, acrylic and tyre cord divisions can be run profitably and at least Rs 3 crore can be earned per month from these operations, he added.
We are shortly going to meet the deputy chief minister of Rajasthan to allow us to run the mills as a workers co-operative, Gupta added. He said Govind Hari himself was keen to be a part of this effort.
JK Synthetics had a turnover of Rs 916.40 crore in fiscal 1996-97 against Rs 1,259.41 crore the previous year. The company has run up a loss of Rs 155.46 cr in the last fiscal bringing its accumulated losses to Rs 211.64 cr
Its net worth is Rs 215.46 crore, consisting of shareholders funds of Rs 79.34 crore, reserves and surplus Rs 87.70 crore and revaluation reserves of Rs 48.41 cr.
