Dunlop's plea of sickness was opposed by the West Bengal government and bankers. But the board, while accepting the contention of the company that its networth of Rs 110 crore as on December 31, 1997, had been completely eroded by the accumulated losses to the tune of Rs 135.81 crore, rejected the revival plan submitted by Dunlop.

The company had pleaded to be declared sick and a speedy implementation of the plan as it was losing Rs 10 crore per month due to heavy debt burden.

The bankers and financial institutions, led by the State Bank of India, United Bank of India and Unit Trust of India, opposed the company's claim of sickness on the ground that the audited results were not sent to them.

The SBI pointed out that since it was not aware of the actual accounts position in absence of the audited results for April-December 1998 periodsubmitted by the company to the board, it was not in a position to comment and asked for time to study the results as well as the revival plan submitted by the company.

The West Bengal government, represented by the state's industry secretary, also said it did not think the company was sick, though without ascribing any reason.

Their objections were over-ruled by the board. As per SICA provisions, BIFR is expected to submit or reject a company's contention of sickness within 60 days. It was prima facie convinced of the company's sickness on the basis of the audited results, as well as the IDBI report which was presented to it last month.

The report had observed that the contentious reversal of entry by Dunlop for a Rs 169.26 crore property sale in its profit and loss account for 1997 was correct. This reversal of this entry had had a bearing on the company's performance. The company also said that it had submitted additional losses of Rs 62 crore in April-December 1997 period which was endorsed by IDBIwhich was primarily supposed to go through Dunlop's previous two year's results.

Declaring Dunlop sick under Section 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act (SICA), BIFR appointed the Industrial Development Bank of India (IDBI) as the operating agency (OA).

The company's plea to BIFR to accept the proposed revival package under Section 17(2) of SICA, however, did not find favour with the board as it did not find it feasible.

Dunlop, while not asking for any sops, had submitted that it would be able to mobilise Rs 127 crore as capital outlay. Out of this, Rs 45 crore would have come by the way of a rights issue. The remaining Rs 82 crore was proposed to be raised through sale of assets in Mumbai and Calcutta. Bankers too opposed the plan as being unfeasible.

Dunlop has now been asked to submit a fresh revival package to IDBI within six weeks. IDBI has been asked to go through the proposal and submit a feasibility report to the board within six weeks thereafter.

Under Section19(2), banks and FIs have the right to agree or disagree with the proposal and whatever new proposal it now comes up with, it will have to take them along for speedy implementation of the scheme in view of mounting losses.

The company, which has now changed its financial year to January-December, has decided not to pay any dividend to the shareholders for last year's nine-month period. The results will come up for approval at the annual general meeting on June 26.