The Hindu Business Line : Dunlop suspends work at Ambattur factory

Dunlop India Ltd has suspended operations at its Ambattur factory here blaming the sale of land by the previous management. An ‘unmeasured’ portion of the land sold in 2004 is within the factory premises making it impossible to operate, according to the announcement in the stock exchange.

The company has also blamed the workers stating that they have been paid Rs 15,000 each by the land buyer, VGN Enterprises, a Chennai-based developer.

Union reaction

The Dunlop Factory Employees Union (DFEU) has said that the land sale was through the BIFR process when the company was under the management of the Chhabrias earlier.

The DFEU had filed a case in the Madras High Court against the sale but the court had approved the sale. Subsequently, after the Kolkata-based Ruias took over in 2005, the union had asked the management to take appropriate action to ensure that the factory is not affected, the DFEU leaders said.

According to DFEU, the Dunlop management was aware of the issue and the DFEU had also repeatedly asked the management to take action. The buyer, VGN Enterprises, had started developing the land three years after the purchase. Also, after the union interceded on the Dunlop management’s behalf, VGN has agreed to work out a compromise if it is essential for production to start. The DFEU and the workers are committed to supporting the management restart production and would co-operate to the full, said the DFEU representatives.

They acknowledged that an educational foundation run by VGN has paid the workers over Rs 15,000 each a few days back. But this was well after the land sale, a court process, in which the workers had no role to play, they said. The Dunlop management had not paid the 1,040 workers wages from May. The company also owed the workers statutory payments such as gratuity to the retired employees and provident fund to the workers, according to the DFEU.

VGN’s offer

In a statement released to the press, Mr V.N. Devadoss, Managing Director, VGN Enterprises, has offered to swap the eight acres of land out of the 60 acres it has bought under the BIFR process for rehabilitation of Dunlop, a sick company since 1998. According to the statement, Mr Devadoss bought the land as a part of a tender floated by an Asset Sales Committee constituted under the BIFR. The land was registered in his favour in June 2004. Dunlop had at that time asserted that only the surplus land was being sold; the sale would not affect the running of the business; and the sale was essential to restart the business.

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