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Dunlop bankers split on recovery of dues

Badal Sanyal

KOLKATA, Jan. 4

COMMERCIAL banks, with a total claim of about Rs 70 crore on Dunlop India Ltd, are believed to have vertically split on how to realise their dues from the ailing tyre company.

The M.R. Chhabria-controlled company is reportedly finding it difficult to continue its "holding operation" due to paucity of working capital.

Available information suggests that Dunlop's bankers, at an informal meeting here today, were sharply divided on the conditions earlier jointly put by United Bank of India and State Bank of India for accepting a BIFR-approved revival scheme.

Banking industry sources say that a section of banks led by UBI and SBI are determined not to accept any revival scheme unless their dues are cleared at one go and the promoter is changed. Another section of banks led by Allahabad Bank wants Dunlop to co me out of the crisis first. They argue that banks' main objective was to ensure normal operation in any business enterprise.

These banks have impressed upon UBI and SBI the need to have meetings with the Dunlop management for finalising repayment modalities for their dues. The State Finance Minister, Dr Asim Dasgupta, had a few days ago advised the banks to sit with the Dunlop management to amicably resolve the impasse.

Meanwhile, BIFR has completed its hearings on the revival scheme prepared by IDBI. It is now waiting for the banks and the Dunlop management to amicably settle differences, so that it can announce the revival scheme early.

Dunlop's two factories -- one at Sahaganj in West Bengal and the other at Ambattur in Tamil Nadu -- have been under holding operation for the past eight months. The operation has proved to be a success, which has been acknowledged by the two State Gover nments.