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S. Shanker

Mumbai, July 27 It is a tale of a workers’ union trying to salvage a company and the livelihood of their 5,000-odd members.

All was well with the GP Goenka Group’s National Rayon Corporation at Kalyan near here before 2005. However, an ill-timed Rs 80-crore foray into nylon not only wiped out profits but also brought the rayon and chemicals unit to a halt in 2008. The NRC Mazdoor Union signed a settlement with the management to ensure sustained employment. Workmen agreed to paycuts and many opted for an early retirement scheme (ERS).

To tide over the crisis, the management decided to sell 345 acres of surplus factory land to a Mumbai-based developer, K. Raheja Universal, for Rs 167 crore in 2006. The management had sought an advance payment, pending receipt of approvals, and the developer obliged by paying Rs 45 crore.

The union also had a binding deal with the management on the use of the property sale proceeds. It was decided that Rs 25 crore would be spent for revamping the plant and Rs 35 crore set aside as working capital, after paying Rs 45 crore for the ERS.

The revival plan hinged on the receipt of the sale proceeds. That, however, was not to be.

A local MLA and trade unionist, Mr Shashikant Shinde, who is spearheading the campaign to resurrect the company, said the proceeds from the sale were contingent upon the company securing various Government approvals for the sale. Some, which came in May, were furnished to the developer.

As the approvals were obtained, the balance amount due to the company was expected.

In the meantime, the plant was kept afloat and workers were paid wages, though production was near zero.

The union alleges that the developer now wants a no-objection certificate for the Urban Land Ceiling Act to remit the balance. Realising that payment was unlikely to be received in the near future, the management issued a lockout notice on July 2, declaring that unless the land sale proceeds were received the lockout would be effective till August 1.

Mr Arun Jain, Managing Director, NRC, said the developer had not got back to him till last Thursday though they had sought time till then. Of the part payment received, Rs 25 crore was spent on the nylon expansion programme and the balance Rs 20 crore used to clear the bank mortgage on the property to facilitate the sale.

According to him, the ULC clearance was not part of the sale agreement. He was confident that the company could be revived if the developer paid up.

Taking matters into its hands, the union has asked Raheja Universal to pay or exit the deal so that the land could be sold to another party and funds used to restart the company.

A press statement from K Raheja Universal said the Mazdoor Sangh has no locus standi as there was only a binding contract between NRC and Raheja Universal. The balance payment was to be paid in stages commensurate with NRC completing various obligations such as obtaining permission of Director of Industry, release of all charges, mortgages and encumbrances and shifting of certain structures.

“The company at all times has been ready and willing to fulfil and comply with its obligations. We are willing to make the payments as per the agreement once NRC has fulfilled its obligations,” it said.

More Stories on : Outlook | Trade & Labour Unions | Maharashtra

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