Oust Chabbria from Dunlop: Govt

He also urged CLB to appoint more government directors on the board of Dunlop to give majority to the government. Government through Department of Company Affairs (DCA) had moved an application before CLB principal bench for appointing additional nine government directors under Section 408 of the Companies Act.

Under this section, CLB has power to appoint government directors on a company’s board.

The government counsel said company is taking the protection of Boardfor Industrial and Financial Reconstruction (BIFR) for not appointing more directors on Dunlop board. In the last hearing in September, Dunlop had asked CLB to wait for the BIFR order before taking a decision on appointing more directors on its board. In reply to government counsel’s allegations, DIL counsel S N Mukherjee said investment in group companies have been made when the company was profitable and had sufficient funds for investment. He also said that some investment had been profitable and was giving returns to the company.

The counsel in this context highlighted investment of Rs 1.9 crore in Falcon Tyres Ltd at a time it was a sick company and was revived by DIL. “Falcon is a profit-making company and Dunlop receives regular dividend along with having marketing and manufacturing arrangement for two-wheeler tyres with it,” Mukherjee inforemed the CLB bench. Government in its petition had alleged that the company had invested more than the funds available with it.

DIL had invested Rs 79.14crore and Rs 91.67 crore in 1994 and 1996 respectively against surplus of Rs 45.18 cr and Rs 82.63 cr available with it during the same period.