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Bengal govt likely to back demand of banks for Dunlop ownership change 

Sumanta Ray Chaudhuri  
Calcutta, Dec 8: The West Bengal government may revive its earlier demand for a change in ownership of Dunlop India Ltd, the ailing tyremaker controlled by Dubai-based businessman Manu Chhabria.

The state government is learnt to be drawing up a list of interested buyers for Dunlop India's Shahgunj factory, prior to a tripartite meet scheduled early next week.

Sources at Writers' Building, the state government headquarters, said the government is also planning to forward a letter to the Board for Industrial & Financial Reconstruction (BIFR) bench requesting a change in the ailing tyre-maker's management.

Dunlop reported sick in the nine-month financial year ending December 31, 1997, after writing back an ``anticipatory'' gain of Rs 169 crore from a land sale deal that fell through.

The management announced a temporary suspension of work at its factories in West Bengal and Tamil Nadu, which continued for close to two years before the units were started again with a fund infusion of Rs 26 crore from the promoter. Both units are now open although the company is operating far below its full capacity.

The company's bankers have refused to either increase working capital limits or assist it unless the management retrieves ``investments'' made earlier. Last week, Dunlop wrote to its principal banker United Bank of India, stating that it owes a total of Rs 83 crore and not Rs 100 crore as claimed by the banks.

Sources said that the state government will again the table its demand for a change in ownership in case the management refuses to come to any settlement with its bankers over the revival of its Sahagunj factory here, which has over 4,500 workers on its rolls in a politically sensitive district.

Earlier, in July, UBI had written to the BIFR bench requesting a change in ownership if the present management is unable to repay the Rs 100 crore it owes the banks.

According to highly placed Writers' Buildings sources, before voicing the demand officially or writing to the BIFR bench, the state government would monitor the proceedings of the meetings between the banks and the Dunlop management.

In case the management decides to stick on to their point and refuse to adhere to the banks' demand of ploughing back the money that has been lent out, the government would again train its guns on the current promoters.

Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.

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