best chance to save Dunlop
slipping turnaround tag
group seeks West Bengal govt's nod to close down Jessop
getting closer to Modi?
Suspension of work notice at Jessop's
Dum Dum plant
Downturn for turnaround tycoon?
When Pawan Kumar Ruia
was negotiating with the West Bengal government and the workers of Dunlop India's
closed Sahaganj factory, he
had one strange condition.
Apart from many favourable clauses in the tripartite agreement, he
wanted the day the tyre company opened again after closure to be an auspicious day.
"The workers were insistent we should reopen the plant on September 23, but I wanted it to happen two days later, on September 25, the first day of Navaratri," says Ruia
, a known devout.
Knowing this is his
best chance yet to breathe new life into Dunlop, Ruia
was pleased with the efforts.
bought a controlling stake in the company in 2005 from Manu Chhabria's Jumbo group, the Kolkata businessman has tried his
hand at making the debt-ridden company work.
has been stymied by labour problems, huge debts, lack of financing and suspicions that he
was interested in the company's real estate assets rather than in running it.
Pawan Kumar Ruia
Pawan Kumar Ruia
Reopening the factory in a staggered manner was something that had been proposed by Ruia
as far back as in 2011, but the idea had been opposed by all workers' unions as well as the government.
Asked how he
had managed to get everyone on board this time, Ruia
says the company had got rid of the "trouble creators" among the workers.
"We closed Dunlop because of some people whose employment had been terminated, who had been suspended and those against whom the company had filed criminal cases," he
"Once these people decided to resign, we thought of reopening the factory.
There were 23 such people.
Of them, five have already retired and 18 have left after availing of retirement benefits."
also says that when matters were being wound up in court, some among those 23 people inflated their outstanding dues to Rs 77 crore.
"It was just to create problems for us," says Ruia
"Now, we have got documents signed by the government in which the workers have agreed that our total liability is about Rs 12 crore.
So I got the biggest advantage out of the deal."
A favourable tide
People in the know, however, say that the bigger positive for Ruia
is that he
has finally got the state government on his
In an interview with Business Standard last year, Ruia
had said he
was a victim of the government's wrong perceptions.
"With Amit Mitra as industry minister and Moloy Ghatak as labour minister replacing Partha Chatterjee and Purnendu Bose, respectively, Ruia
has managed to have his way in the tripartite agreement."
As they do for all practical businessmen, Ruia's
networking across the political spectrum has helped.
"I have personally spoken to Mitra several times," he
"I am happy that I have been able to communicate my views to him."
Things would not have worked out better for Ruia
, which is contesting a 2013 Calcutta High Court order to wind up in the Supreme Court, has also been granted 'relief undertaking' status by the West Bengal government.
Such a status prevents creditors of a company from seeking liquidation of its assets for recovery of their dues.
Until 2010, Dunlop enjoyed protection from its unsecured creditors under the West Bengal Relief Undertakings (special provisions) Act.
But the status was eventually withdrawn by the Left Front and the Trinamool Congress government that came in also did not renew it.
Now, apart from the favourable tripartite agreement, Ruia
has got official protection from creditors as well.
But we are contesting their claim and have not paid them," says Ruia
has pegged new investments required to get the plant running at Rs 10-15 crore.
The scepticism is rooted in the fact that Sahaganj
has never seen full scale operations since Ruia
took charge in 2005.
The same is true for Dunlop's Ambattur plant in Tamil Nadu, which has been closed.
has many things in his
favour at this moment.
TROUBLED JOURNEY: DUNLOP UNDER PAWAN RUIA
Nov '05: Pawan Kumar Ruia
acquires Dunlop from Manohar Rajaram Chhabria's Jumbo group
Aug '06: New management reopens Ambattur plant
Oct '06: Sahaganj plant reopens
Jul '07: Ruia
takes Dunlop out of the purview of the Board for Industrial and Financial Reconstruction by revaluing its fixed assets
Jan '10: Dunlop India re-lists shares on BSE
Apr '11: Pawan Ruia steps down as Dunlop India chairman on January 31, 2011
Aug '11: Pawan Ruia
quits Dunlop India board
Pawan Kumar Ruia