Chief Minister Mamata Banerjee today said that the West Bengal government would initiate steps to take over Ruia Group's ailing Dunlop India and Jessop & Co.
"We have decided to take over Jessop and Dunlop. We will take steps in this direction and will also bring a bill," Banerjee said in the state's Assembly on Friday.
The government is likely to table the bill as soon as possible."Employees and labourers in Dunlop are in distress and we cannot let this go on. Thus we have decided to first take over the managerial control of Dunlop and Jessop and will decide on the course thereafter. It will also further our goal of reviving industry in the state", the state's parliamentary affairs minister and senior Trinamool Congress leader Partha Chatterjee told Business Standard.
He said these two companies of the Ruia Group have land and assets that are idling and thus the state government has taken this decision. "We are watching the developments. Until now, there has been no communication from the state government in this regard", an official in Dunlop told this newspaper.
Land in the state, especially in and around the metropolis is much demanded by investors."There hasn't been any improvement in the situation in these two companies for years", Chatterjee said.
The move comes in the wake of the union commerce minister Nirmala Sitharaman leading the way to take over seven sick tea gardens of Duncans where labourer deaths on account of malnutrition has been alleged.
The state government had written to the Union commerce ministry in the past citing problems in these gardens and Centre acted on it, deriving significant political mileage ahead of elections.
According to observers, the decision on Dunlop and Jessop may help Banerjee and the ruling Trinamool Congress in the upcoming Assembly elections as it is siding with the workers.
Leader of Opposition and senior CPI-M leader Suryakanta Mishra has however, slammed the decision doubting the government's intention.
"This is just an eye-wash before the polls", he said. Timeline of Dunlop India and Jessop & Co under Ruia Group 2003: The Ruia Group led by Pawan Kumar Ruia acquires Jessop & Co from the government for Rs 18 crore. The company was already on the BIFR 2005: Ruia therafter takes control of Dunlop which then had liabilities in excess of Rs 650 crore 2006: The Dunlop plant at Ambattur resumed production on 27 August, while Sahaganj opened its gates on 31 October 2007: Dunlop came out of BIFR’s purview on 19 December 2008: Shahgunj factory closed on back of limping dues 2010: Dunlop relists on the Bombay Stock Exchange 2011-12: Dunlop shuts down both the plants at Sahagunj and Ambattur citing labour issues 2013: Courts put an order to wind up Dunlop on the application of creditors under review. Ruia approaches state government to permanently close Jessop citing law & order and labour problems 2014: Jessop factory shut down indefinitely 2015: Department Related Parliamentary Standing Committee on Commerce team visits Sahagunj factory in January. Terms Dunlop beyond revival. Rejects case for a takeover 2016: West Bengal chief minister Mamata Banerjee informs state assembly that it will takeover Dunlop and Jessop
The CPI-M backed Centre of Indian Trade Unions (CITU) also expressed their disbelief in the government's intentions.
"This is a mere hogwash and this government is making false promises. However, if it at all happens, it will benefit the labourers in these companies but I doubt if it is at all serious", Dipak Dasgupta, general secretary of CITU told this business daily.
The current owner of these companies, Pawan Ruia had taken over control of Dunlop in 2006 from Manu Chhabria and of Jessop from the government in 2003 but faced severe operational and labour problems which ultimately culminated into production being finally stopped in 2010.
Since then, although Ruia expressed his interest to restart production in these companies, particularly Dunlop, a huge financial backlog, depreciation of machinery, pending wages and related issues had stopped the industrialist from executing his plans.
Citing irreparable damage to Dunlop, the Department Related Parliamentary Standing Committee (DRPSC) on Commerce team had ruled out Dunlop as a fit case of takeover in January last year when it visited the plant in Sahaganj.
Dunlop's problems date back to when it was controlled by Manu Chhabria's Jumbo group. In 1996, the Dunlop trade union had asked the prime minister's office as well as the finance minister to remove Chhabria. However, things worsened further and by 2000, the Sahagunj factory was closed with Ambattur limping.
Amid much fanfare, Ruia acquired Dunlop in 2005 and in 2007 took it out of the purview of the Board for Industrial and Financial Reconstruction and relisted the company on the Bombay Stock Exchange in 2010. But the company never could shrug off its blues.
Nevertheless, judicial cases related to Dunlop are underway in the Calcutta High Court and Supreme Court. While the judiciary has asked the Ruia Group to liquidate the assets, the Ruia Group has challenged the ruling in higher courts.
The parliamentary affairs minister, however, clarified that legal implications have been looked into before the call was taken.
"We will look into in case legal complications arise afterwards. As of now, before taking this call, the legalities involved have been considered", Chatterjee added.
Dunlop and Jessop factories are closed since 2014 while these companies together has around 1,100 workforce.