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Mafatlal union opposes plan to sell surplus land

Archana Chaudhary

MUMBAI, June 23

MAFATLAL Industries, declared sick by BIFR after having accumulated losses over Rs. 350 crores, is now facing resistance from the union for its proposal to sell surplus mill land.

According to the union, the company had proposed selling of surplus mill land to offset losses and pay back loans. ``We don't mind selling of land as long as the management is willing to restart the mills. But we fear they may misuse the proceeds,'' Mr. Ramachandra Ulaval, General Secretary, Rashtriya Mill Mazdoor Sangh said.

``If they (company) don't have the money to pay electricity bills, how can we trust what they will do with the sale proceeds?'' he asked.

Workers of two textile units of the Arvind Mafatlal Group, which were shut down on June 12, want an independent commission set up for settling the dispute.

``We would like an independent commission to be set up, with representatives of Government, management and union, if they (the Government) are really interested in settling the current dispute,'' Mr. Ulaval, told Business Line.

The Mazgaon and Lower Parel units of the loss-making Mafatlal Group, which employ about 1,500 and 800 permanent workers respectively, were closed down two weeks ago after Tata Electric Company discontinued power supply to the units.

Mafatlal Industries had approached BIFR and was declared sick in March this year. According to the company, it is in the current position because ``in the absence of timely financial support'' from banks and financial institutions to the company's ``busi ness and financial restructuring plan'' which was submitted in October 1998, a company release said.

The company management was reportedly warned by the Maharashtra Chief Minister that the Government would take over the two units if no steps were taken to revive the mills.

``We have submitted a revival plan to the Government which will be discussed later,'' a senior Mafatlal official said. He, however, refused to divulge any further detail.

The company, in a press release, said that the present situation had arisen because massive efforts over the last 18 months to get the restructuring package cleared by financial institutions and banks ``did not bear fruits'' inspite of approaching the Gu jarat, Maharashtra and the Union governments for support.