On March 26, the Calcutta High Court appointed a provisional liquidator to assume charge of the assets belonging to Dunlop India Ltd.
This measure has stripped the company’s board of directors and chairman Pawan Kumar Ruia of the power to transfer further assets or property from the company. The court’s official liquidator will serve as provisional liquidator, and in addition to conducting an inventory of existing assets he will attempt to recover any prior Dunlop India asset transfers deemed to be fraudulent in nature; according to Justice Sanjib Banerjee, the liquidator will take steps to reclaim properties sold by Dunlop in 2006-07.
Justice Banerjee described Dunlop India management, headed by Ruia, as treating the company as a “cash cow,” and he declared the company’s assets are “in serious jeopardy in the hands of those at present responsible for protecting (them).” A Dunlop India spokesperson said the Ruia Group-owned company would appeal the court’s decision, but declined to further comment. The company is said to owe its credits around Rs 3.1 billion, mostly in unsecured loans.
The Ruia Group bought Dunlop India from the Jumbo Group in 2005. In recent years, the Ruia Group has also acquired a number of European automotive component manufacturers, but some of these deals have turned sour; in mid-March German vehicle body seal manufacturer Draftex Automotive – which Ruia purchased in 2009, its second acquisition in Europe – announced its insolvency. (Tyres & Accessories)
